The tremendous success of Alfred Jones's hedge fund during the 1960s (when his fund was outperforming even the best mutual funds despite a 20% fee deduction) meant that by 1968 around 200 hedge funds were in operation. Following modest growth during the 1970s and 1980s, the 1990s saw the growth of hedge funds even outstripping that of the US equity market.
Exact figures on the size of the industry today are difficult to decipher as funds face very few disclosure requirements. Estimates of the size of the industry vary. However, the general consensus is that there are in excess of 3,000 hedge funds in operation managing over USD 500 billion in capital. Some estimates have put the figure in excess of 5,000 funds for the whole industry.
It is worth, however, putting the size of the hedge fund industry into context; the total market capitalization of the US equity market was in the region of USD 16 trillion by the end of the year 2000.
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