In 1990 hedge funds managed some $39 billion of assets. By late 2006 that figure had grown to $1.3 trillion. That is a staggering increase. Equally staggering is the amount of money successful hedge fund managers earn. In 2006 the top 25 hedge fund managers were paid $14 billion between them, with the top three earning over $1 billion each.Most people have heard the term hedge fund but few are clear about what exactly a hedge fund is or what it does. This guide aims to put them in the picture with the clarity and lively prose that The Economist is famous for. It provides a succinct survey of the industry for all those who think they should know about hedge funds, but do not. It is aimed at all those who might want or have to deal with a hedge fund: private investors, the trustees of a pension fund, the directors of a listed company, lawyers, accountants and who may be interested in working in the industry. It is also aimed at those who happily criticise hedge funds without really knowing what they do.

Author Biography

Philip Coggan writes about financial markets for The Economist having previously worked for 20 years for the Financial Times and been its Investment Editor. He is the author of the Money Machine: How the City Works and Easy Money.