The institutionalisation of the hedge fund industry

Wed Apr 4, 2007

Martin Phipps, head of alternative distribution, Gartmore Investment Management

At the end of 2003, according to a 2004 report by Casey Quirk & Associates, US institutional investment in hedge funds stood at around $66 billion. Since then, according to an updated report published in October 2006, the estimated assets from this segment of the market have more than doubled, to around $148 billion.

While this is an extraordinary growth rate, the figures come as no surprise. The last few years have seen significant institutional investment from a number of major plans including General Motors, Pennsylvania State Retirement System and Texas Teachers in the US, while in Europe ABP and MN Services, as well as the UK Royal Mail pension plan, have led the way.

But this is just the tip of the iceberg. The report estimates that institutions worldwide have $361 billion invested in hedge funds, and that this figure will...

ISSN: 2151-1845 / CDC10004H

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