Hedge Fund assets projected to grow at an annual rate of 15 percent through 2008
Tuesday, September 20, 2005 : PermalinkWEST PALM BEACH, FL (www.hedgeco.net) - New released research conducted by TowerGroup reveals the combined hedge fund assets of both single hedge funds and fund of funds will grow at anannualized rated of 15 percent between 2005 and 2008. Such growth means that by 2008, hedge funds total managed assets will increase by additional 75 percent over the period.
Such predictions have taken into consideration the growing interest of institutional investors in hedge fund managed portfolios. Secondly, it is also anticipated that as hedge funds continue to lower their investment minimums, particularly fund of funds managers, more retail investors will be drawn into hedge fund investments. The new survey also concluded that the emerging hedge fund client base in addition to the asset growth projections would create new opportunities for hedge fund affiliated service providers.
Matthew Nelson, analyst in the Investment Management research practice at TowerGroup and author of the research said, “The changing client base of hedge funds, their use of multiple prime brokers, and increasing regulation by the SEC are all driving demand for better technology and transparency.†Nelson added, “Fund administrators must quickly broaden their technology capabilities and service offerings to keep pace. At the same time, battle lines are being drawn as prime brokers push into hedge fund administration, and global banks acquire traditional fund administration providers.”
Among other findings, the new study said, “While hedge fund assets are in for significant growth, the actual number of hedge funds themselves will remain relatively flat. Growth in the number of hedge funds will slow to a compound annual growth rate of 1% through 2008, the result of a slight increase in the fund attrition rate (currently at 5%) coupled with a decline in the number of new fund entrants due to heightened SEC oversight. TowerGroup projects that by 2008, as hedge fund assets cross the $2 trillion mark, over $2.5 billion will be spent annually on hedge fund administration services alone.â€Â
Paul Oranika
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net
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