AIMA looks back at the institutionalisation of the industry

Mon Sep 5, 2011

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Andrew Baker, chief executive officer of AIMA, takes a look at change and innovation in hedge funds over the past decade


Andrew Baker



One of the most important trends that we have observed at Alternative Investment Management Association (AIMA) over the course of the past decade has been the "institutionalisation" of the hedge fund industry, as reflected in the operational infrastructure developed by managers, the increasing and now majority position of institutional investors among the industry's capital base, and the continuing convergence of investment practices among traditional and alternative asset managers. This movement has had significant implications for hedge fund firms and their investors, influencing policy, regulation, infrastructure and even the investment styles of many managers.

Evidence of how much has changed can be found by looking at the profile of hedge fund investors. Ten years ago, those who typically invested in hedge funds were high-net-worth individuals. Today, investors in hedge funds are of course more likely to be institutions such as public and private sector pension funds, insurance companies,...

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