AIMA: Smaller Firms Remain the Lifeblood of the Hedge Fund Industry

(FINalternatives) The hedge fund industry comprises two branches. One includes firms managing $1bn or more in assets. This group’s star managers feature regularly in the pages of The Wall Street Journal and the Financial Times. It contains about 10% of the industry in terms of the number of firms, but manages about 90% of the assets. Much attention focuses on this group – the “billion-dollar club”. Industry research and performance indices tend to be skewed to the larger firms. Consultants’ lists of approved hedge funds are dominated by the larger brands. Many of this group’s constituents are big institutionalised businesses whose clients include some of the largest institutional investors in the world, such as sovereign wealth funds and public sector pensions.

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