Nearly every hedge fund opens its door to investors where every manager looks a relative value between junior and senior securities. Securities and Exchange Commission do not dictate same rules for hedge funds which do for traditional mutual fund therefore hedge funds bring a large tax bite because manager sell & buy frequently where investor incur capital gains which normally taxed at income tax rate. Hedge funds by using different strategies for earn active returns for the investors where the funds managed or make use of leverage and derivatives for generating higher returns to their investors.
Jones altered structure of his investment vehicle In 1952 which convert from general partnership to the limited partnership and add 20% incentive fees for manage partner and as money manager to short selling, By use of leverage risk by partnership with investors and with the investment performance, Jones earn in investment history as the father of the hedge fund.
“Wealthy people often want to access alternative and private investment strategies”