A hedge fund generally refers to a lightly regulated private investment fund sometimes characterized by unconventional strategies (e.g., strategies other than investing long only in bonds, equities or money markets). They are primarily organized as limited partnerships, and previously were often simply called "limited partnerships" and were grouped with other similar partnerships such as those that invested in oil development.

Origin and development

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The term hedge fund dates back to the first such fund founded by Alfred Winslow Jones in 1949. Jones' innovation was to sell short some stocks while buying others, thus some of the market risk was hedged. While most of today's hedge funds still trade stocks both long and short, many do not trade stocks at all.

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FT Alphaville

Further reading
Wed, 20 Aug 2008 06:52:38 -0000
Elsewhere on Wednesday: - Lehman's asset sale won't fly, analyst says. - Back to the future: are banks getting religion? - Running a hedge fund is harder than it looks on TV, Ron Insana. - Will the hedge fund model prove to be broken? - Trading in a dark pool? Watch for sharks. - A Chinese venture-capitalist gold rush beyond the Olympics....
Pink Picks
Wed, 20 Aug 2008 06:07:55 -0000
Comment and analysis from Wednesday’s FT: Fannie and Freddie (1): News analysis Investors in securities backed by Fannie Mae and Freddie Mac are locked in a test of wills with the US Treasury, write Michael Mackenzie and Saskia Scholtes. Meanwhile, as mortgage spreads continue to widen, the capital positions of the agencies and weakened banks deteriorate further in what could become a self-reinforcing pattern....
US settles on hedge fund fraud
Wed, 20 Aug 2008 04:19:07 -0000
A Canadian hedge fund manager ordered to pay almost $300m in compensation and fines after defrauding investors is unlikely to pay more than has already been recovered, said lawyers for the receiver of the failed fund. A US judge ordered Paul Eustace, 43, to pay $279m to compensate investors in Philadelphia Alternative Asset Management's four failed funds for losses while fining him and his company $20.8m....

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