The Shifting Realm of Hedge Funds

Abstract

This Article focuses on the development of the hedge fund landscape in the United States by focusing on the industry’s continued path towards a mainstream asset class, the enormous growth of the industry in terms of assets under management, and the increase in shadow banking activities. As hedge funds increase assets under management through investment by institutional investors and initial public offering activity, the industry is continually changing from its reclusive origins to more mainstream prominence in finance. Further, hedge funds have grown at an impressive rate — particularly since the recent global financial crisis — and now command the same respect and care that other typical institutional investors, such as pension funds and university endowments, have wielded for decades. Finally, hedge funds are now central players in the shadow banking arena, bringing the capital and tactics that can shape the future of high-finance.