A recent survey by Absolute Return magazine showed that U.S hedge funds now control some $1.2 billion in assets as of Jan. 1, 2007. Globally, assets under management is as high as $2 trillion. Hedge funds have grown to the point where they are considered one of the biggest players in nearly every market--stocks, bonds, commodities and derivatives.
Hedge funds are considered an "alternative investment" vehicle. The term "alternative investment" is the general term under which unregulated funds operate; this includes private equity and real estate funds. The total "alternative" category (which would include private equity and real estate) is not covered within the scope of this book but it is useful to know that often people refer to hedge funds as an alternative investment. Mainstream funds are investment funds that everyday investors can purchase; mutual funds are the prime example of a mainstream fund.