- Assets back over 2006 level, although below 2007
- Investor inflows continue in spite of turbulent
- New York still the dominant centre, followed by
Assets in hedge funds of traditional types, which are mostly
domiciled offshore or structured as limited partnerships (LPs)
in the United States, reached combined assets of $2.158
trillion at the end of June 2011 – up from $2.022
trillion at the end of 2010.
However, there is now almost another $100 billion run in
hedge fund strategies that are only available in a European
onshore UCITS-compliant format. If these
'standalone’ UCITS strategies are included, the
total assets of the industry reached $2.256 trillion at the end
of June – a rise of 7.5% from the corresponding figure
of $2.099 trillion at the end of 2010, reflecting the faster
rate of growth in the UCITS side of the industry.
The latest numbers confirm that, following a sharp
contraction in assets of about 30% during and after the crisis
of 2007-08, assets in global hedge funds continued to recover
during the first half of this year – despite the
turbulent markets and flat overall performance by hedge funds
in the first six months of the year.
This in turn implies that most if not all of the increase is
accounted for by renewed inflows of money from investors, who
have been gradually increasing their allocations to the hedge
fund sector again in the past couple of years at a time of
increasingly high volatility in financial markets.
The latest figures take the industry above the asset levels
of 2006 again, but not quite back to the peaks of 2007
– when global hedge fund assets very briefly hit a
high of over $2.6 trillion.
Almost all of the recent increase has been accounted for by
the bigger firms getting bigger. The elite group of firms that
run hedge fund assets of $1 billion or more – the
global Billion Dollar Club – grew from combined assets
of just over $1.7 trillion at the beginning of the year to
almost $1.85 trillion by mid-2011. These top 345 firms now
account for about 82% of the industry’s total
As in previous years, the lion’s share of
assets continue to be managed in the US, which still accounts
for well over $1.5 trillion – close to three-quarters
of the total. Among the major markets, the rate of growth in
assets was also the fastest during the first half in the US,
where it was up by over 7%.
In Europe, industry assets edged up by 4% – from
$423 billion to $438 billion (excluding standalone UCITS funds)
– during the first half of the year, according to the
latest EuroHedge survey. In Asia, assets actually slipped by 5%
to $145 billion during the first half, according to the latest
AsiaHedge survey, on the back of slightly negative average
returns in that region during the period.
New York continues to be the leading centre of the industry
by a margin, with London in second place and Connecticut
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