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Global Hedge Fund Assets Near $2.35 Trillion as Big Firms Drive Growth

The growth in global hedge fund assets continued to accelerate during the first half of 2013 on the back of robust fund performance across the industry and new inflows from investors worldwide, according to the latest research from leading global industry information provider HedgeFund Intelligence (HFI).

In the newly-published Autumn 2013 issue of its bi-annual Global Review, HedgeFund Intelligence reports that assets in hedge funds of traditional types — which are mostly domiciled offshore or structured as limited partnerships in the US — had reached $2.337 trillion (including parallel onshore versions) as at the end of June this year.

That represents an increase of just over 6% compared with the corresponding figure of $2.208 trillion as at the end of 2012 — and is up by almost 9% from a year ago, when assetsstood at $2.147 trillion at the end of June 2012.

If other hedge fund strategies in standalone European UCITS onshore structures (with no parallel offshore versions) are also added, the global industry assets total rises to $2.456 trillion as at the mid-point of 2013 — up from $2.339 trillion at the start of the year.

The bulk of the industry’s total assets are concentrated in funds managed from North America — which accounted for $1.697 trillion in assets at the end of June, some 73% of the global industry — with European-based funds managing $425 billion (18%), Asia-based hedge funds running a further $91 billion (4%) and the balance coming from funds based in Latin America, Australasia and Africa.

Given that the HedgeFund Intelligence Global Composite Index recorded a median return of just under 3.75% across all hedge funds in the first half of the year, it is clear that much of the overall growth in assets during the year resulted from investment performance.

However it is also clear that new capital inflows are starting to gather pace again, with a generally strong financial market backdrop helping to fuel investor confidence.

The industry has now recovered much of the earlier steep decline that it suffered in 2008 from the onset of the global financial crisis — when global hedge fund assets fell by over 30% from the brief peak of $2.7 trillion in mid-2008, as tracked by HFI — and the overall global hedge fund assets total is now within 10% of its pre-crisis peak.

The big firms dominate

Meanwhile, the biggest players in the global hedge fund industry are continuing to get bigger, accounting for a rising proportion of total assets, according to the latest statistics on the Global Billion Dollar Club – the elite group of firms that manage $1 billion or more in hedge fund assets.

Collectively, the 389 current members of the Global Billion Dollar Club (up from 367 at the start of this year) managed assets of $2.039 trillion as at the end of June this year, up again from $1.925 trillion at the start of 2013, accounting for some 87% of the industry’s total assets.

The lion’s share of this figure is further concentrated in the ‘Super League’ of biggest firms that manage $5 billion or more in assets. The number of firms in that category has edged up from 110 from 107 at the start of the year. Collectively these firms manage hedge fund assets of $1.43 trillion — up from $1.37 trillion at the start of 2013.

The US market remains firmly the top location for the world’s biggest hedge fund firms. New York is still the biggest single centre of the industry by a margin, with 175 of those firms up from 157 at the start of the year — with the city accounting for over 45% of all Global Billion Dollar Club assets — with a further 28 member firms based in Connecticut, 24 in California and 15 in Massachusetts.

London remains in second place overall, being home to 57 of the Club members and representing just over 13% of the total Club assets. The Asia-Pacific region accounts for just over 3% of Club assets — up from 2.5% at the start of the year — with Hong Kong housing 17 Billion Dollar Club members and nine member firms based in Singapore.

In addition to the global assets survey and the latest Global Billion Dollar Club analysis, the Autumn edition of the HFI Global Review also features detailed analysis of regional industry trends in the Americas, Europe and Asia — both for single-manager hedge funds and for funds of hedge funds.

Note:
The figures referred to 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 InvestHedge, part of the HedgeFund Intelligence group.

About HedgeFund Intelligence

Established in 1999, HedgeFund Intelligence is the leading provider of news, analysis and data on all aspects of the global hedge fund industry. The company provides dedicated information on US, European and Asian single-manager hedge funds through its specialist titles Absolute ReturnAsiaHedge and EuroHedge – as well as information on hedge fund investors worldwide, through InvestHedge, and on alternative UCITS funds, throughAbsolute UCITS.

 

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