Hedge funds are actively managed services that pool together money from a bunch of investors and then use certain investment strategies to achieve high returns and will distribute a share of the profit to the clients. They’re considered risky investments and sometimes are only exclusive to clients with high net worth. Part of the reason they’re riskier to invest in is because they are less regulated than other investment funds like mutual funds and because they borrow a lot of money to take advantage of leverage.
In plain English, a hedge is some form of protection against financial losses. To “hedge one’s bet” means to avoid commitment in the face of difficult choices. A hedge fund therefore means, in a more literal sense, a protection of money, however they gradually got riskier after the invention of the concept in 1949.