Global hedge fund assets up 11% in 2010 – and back above $2 trillion

Mon Mar 28, 2011

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• Assets reach levels of 2006, but still well below peak of 2007; • New York still the leading centre, London still dominant in Europe, Hong Kong rising


25 March 2011, London -  Assets in global hedge funds rose by more than 11% during 2010 to reach more than $2 trillion again by the end of last year, according to the latest research by HedgeFund Intelligence. 

Assets in hedge funds of traditional types, which are mostly domiciled offshore or structured as limited partnerships in the United States, managed combined total assets of $2.022 trillion by the end of 2010, up from $1.820 trillion a year before. If hedge funds and other absolute return funds in European onshore UCITS structures are also added, the total rises to $2.099 trillion - up 13% from the figure (also including UCITS funds) of one year previously.

The latest numbers confirm that, after a prolonged period of contraction due to net redemptions during and following the global financial crisis, investors have started to allocate more money to hedge funds. The growth rate of assets was higher than the median performance of hedge funds globally last year, which was about 7.7%, and also slightly higher than the mean average performance of about 10%.

The latest figures take industry assets back up to levels last seen in 2006, though still some way below the historic peak of over $2.6 trillion which was reached during 2007.

As in previous years, the majority of industry assets are still managed in the United States, where there are now 220 firms that manage hedge fund assets of $1 billion or more. New York is still the biggest single centre of the industry, being home to no less than 128 of those firms, still far ahead of London which is in second place with 63 billion dollar-plus firms.

Nevertheless, despite fears that London may be losing its status due to tax and other changes in the UK, London remains by some distance the biggest centre of the industry in Europe - well ahead of Stockholm, Paris, Geneva and the Channel Islands. During the year, however, the biggest change in has occurred in Asia, with the number of billion dollar plus firms based in Hong Kong rising sharply from 6 to 11.

Collectively, the global Billion Dollar Club now manages just over $1.7 trillion, over 84% of the total - up a little again from about 82% one year before. However, the latest figures confirm perceptions that the concentration of assets among the very biggest players - the 'super-league' of fund groups that manage $5 billion or more - has increased substantially during the year. At the end of 2009, this super-league (which then numbered 83 firms) managed collective assets of just over $951 billion. Now there are 93 firms that manage $5 billion or more, and collectively they manage $1.154 trillion.

Neil Wilson, managing editor at HedgeFund Intelligence, said: "The latest numbers confirm that the hedge fund industry is growing again, although the lion's share of the growth is being captured by the biggest brand names. Investors seem to be increasingly convinced that not only did hedge fund not cause the global financial crisis, but also generally performed pretty well during what was a very difficult period. Looking forward, we expect to see assets grow further, and opportunities to improve again for smaller and newer funds."

THE GLOBAL BILLION DOLLAR CLUB, January 2011

Location of manager

Number of firms

Assets Jan 2011

NY, USA

128

764.57

London, UK

63

246.47

CT, USA

26

180.02

CA, USA

19

83.22

MA, USA

12

98.66

Central, Hong Kong

11

15.56

TX, USA

8

26.22

Singapore

7

9.64

IL, USA

6

25.89

NJ, USA

5

27.7

Sydney, Australia

5

19.34

MN, USA

5

18.12

Toronto, Canada

4

6.94

Stockholm, Sweden

3

18.31

Paris, France

3

17.96

Hamilton, Bermuda

3

10.12

WI, USA

3

9.3

Tokyo, Japan

3

5.39

Melbourne, Australia

3

4.03

Edinburgh, UK

2

11.95

GA, USA

2

11.07

Geneva , Switzerland

2

8.04

Rio de Janeiro, Brazil

2

3.72

FL, USA

2

3.52

Moscow, Russia

2

2.53

Other

18

72.24

Total

330*

1700.53

*Number of firms de-duplicated to account for groups which run $1 billion-plus funds from more than one location The geographical breakdown of the industry's total assets in January 2011 was as follows:

 

Note:

The figures shown here are for single-manager hedge funds only. They do not include or double-count money allocated to hedge funds via funds of funds. Assets in funds of hedge funds are tracked separately by InvestHedge.

 

About HedgeFund Intelligence:

HedgeFund Intelligence is the leading provider of news, analysis and performance data on the global hedge fund industry. The company provides dedicated information on US, European, Asian and African single-manager hedge funds as well as on hedge fund investors worldwide.

 

For more information, please contact:

Neil Wilson, Managing Editor, HedgeFund Intelligence 
+44 (0) 20 7779 7359 / nwilson@hedgefundintelligence.com

Europe:  Toby Bates / Del Jones, Merlin +44 (0) 20 7726 8400 / tbates@merlinpr.com  or djones@merlinpr.com

US: Armel Leslie, Walek & Associates: +1 212 889-4113 / aleslie@walek.com

Asia-Pacific: Sophie Sophaon, Walek & Associates: +852.2273.5102 / Mobile: 852 6112 7553 / ssophaon@walek.com