The first hedge fund was created in the US during 1949 by Alfred W.Jones. Since then investing through a hedge fund has become very popular worldwide, especially during and after the 90s decade. Today, there are about 8,500 hedge funds in the world and their total assets are estimated at about 1.5 trillion USD.
Lipper Hedge Funds Composite Index
Hedge fund investors have historically enjoyed higher returns than the average investors of common stocks. This can be justified by comparing the historical performance of the Lipper Hedge Funds Composite Index, during the last 10 years, to the US popular Index S & P 500. The Lipper Hedge Funds Composite 'track' changes in the performance of a certain number of hedge funds.
Hedge Fund Managers & Management Fees
A hedge fund consists two roles: the manager (general partner) and the investors (limited partners). Actually, a manager can also be a limited partner, as he may invest his own money in the hedge fund. Usually, the manager of a hedge fund is a prominent person in the community with special skills and many contacts. The management fee paid is charged to investors (limited partners). Usually, the annuity fees are equal to 1% of the total assets of the hedge fund. Additionally, the management fee may include also a certain proportion of the Fund’s annual total profits.