Hedge Fund & Private Equity / The Difference?

Hey, everyone! Today, I want to answer the question: What’s the difference between a hedge and private equity fund?

History of Private Equity Funds

The 1st private equity fund was started in 1901 by a man named JP Morgan.

He bought out Carnegie Steel Co for $80 million using a trust fund.

Private Equity companies either buy the company, break it up and sell it, or they buy the company, restructure, and grow it.

Background of Hedge Funds

AW Jones started the 1st hedge fund.

Typically, when the value of the S&P 500 or index funds rise, the value of gold falls, and vice versa.

The principle of buying gold as well as the S&P 500 is an example of using gold as a “hedge.”

In this case, buying both assets would guarantee that overall value would rise.

AW Jones proved that using this ‘hedge’ method to invest hurts your gains but minimizes your losses.

So, he launched the 1st hedge fund by investing the capital in stocks that countered each other!


So, what’s the difference between a hedge and private equity fund?

Like I said in my video…

“In general, PE funds buy private stakes in massive companies, then they sell them to bigger companies, IPO them, or break them apart.”

I also explained that most hedge funds include trading on the public markets.

They are usually run by a credible fund manager like George Soros or Bill Ackman.

I suggest that you start funds that are specific and can capitalize on your niche. As your reputation grows, you can start managing bigger and more general funds.

If you need help starting your fund, go to investmentfundsecrets.com!

That’s it for today!


Bridger Pennington

Want to get direct guidance for your fund? Schedule a time with my Fund Advisors!

DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.

Leave a Reply