Alfred Winslow Jones

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Alfred Winslow Jones

Alfred Winslow Jones is known as the father of the hedge fund industry. He and four friends formed the first hedge fund in 1949, with Jones as the managing partner. His dissertation from Columbia University, where he received a Ph.D. in Sociology, was turned into a published book called Life, Liberty and Property: A Story of Conflict and a Measurement of Conflicting Rights. [1]

His innovation in fund management was to combine two techniques: buying stocks with leverage (or margin), and selling short other stocks. Each technique was considered risky and highly speculative, but when properly combined would result in a conservative portfolio.


Background

Jones started A.W. Jones & Co. at the age of 48. In his earlier life, he was in the Foreign Service in Berlin, and then monitored civilian relief efforts for the Quakers in the Spanish Civil War. During World War II he covered finance, politics, and the war effort for Fortune Magazine. By 1948 he had left Fortune but was working freelance for the magazine on an article entitled “Fashions in Forecasting.” It was during the research for this piece on technical stock market analysis that he began to formulate the ideas for his fund.


Education

Jones was educated at Harvard and later received a Ph.D. in Sociology from Columbia University.

References

  1. A.W. Jones: History of the Firm. A.W. Jones.