HedgeCo.Net

HedgeCo.net (West Palm Beach) – State Street Corporation released two papers on alternative investments as part of its Vision series of thought-leadership reports. The papers examine two key components of alternative investments, hedge funds and private equity, and their future prospects amid the global economic downturn.

While both industries have been hard-hit by the financial crisis, they will likely adapt to the changed investment environment and continue to provide significant long-term opportunities for institutional investors, State Street says.

“With so much debate within these sectors as complexity has heightened over the past year, we want to help identify the actual market conditions and trends that will determine the future of hedge funds and private equity,” said Jack Klinck, executive vice president and global head of State Street’s Alternative Investment Solutions team. “The research and insights presented in these reports will help institutional investors as they make their investing decisions.”

“New Views of the Hedge Fund Industry” cites two major trends affecting the industry: a migration to third-party administration and custody services and increased regulatory oversight. While hedge fund redemptions are expected to continue through 2009, according to the report, “anecdotal evidence suggests that investors are starting to regain confidence.”

“The hedge fund industry will emerge from the financial crisis – smaller, in terms of the number of funds, but eventually larger in terms of assets under management,” the report states.

State Street’s second Vision paper, “Private Equity at the Cross Roads,” notes that although the industry is currently under pressure from the financial crisis and recession, “many believe that private equity is about to enter a new phase of more sustainable growth. Over the long-term, investors and governments will look to private equity for its significant capital resources, management expertise, and high risk tolerance to help restore economic strength as impaired assets are wound down and fresh investments are required for new and expanding businesses.”

With approximately $252 billion in hedge fund assets as of March 31, 2009, State Street provides a complete set of servicing and management solutions for hedge funds, including recordkeeping, fund accounting, valuation, risk management and regulatory reporting.

Alex Akesson

Editor for HedgeCo.net
alex@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!

Tags: alternative investments, assets-under-management, custody services, economic-downturn, future prospects, global-head, hedge fund redemptions, institutional-investors, investment environment, investment solutions, regulatory oversight, rsquo, second vision, solutions team, term investors, third party administration, thought leadership, vision paper, vision series, west palm beach

West Palm Beach (HedgeCo.net) – The top 10 hedge fund adminstraators reported $1.64 trillion in hedge fund assets under administration (AuA) in the Q4 2008, according to HFN, with Citco Fund Services, State Street Alternative Investment Solutions and Goldman Sachs Administration Services taking the top three positions.

HFN also released early estimates for February hedge fund asset flows which indicate the outflow from the industry continued during the month, but at a much slower rate than prior months. Early estimates show hedge fund assets fell an additional 2.2% in February 2009 to $1.746 trillion compared to a reduction of 7.6% in January 09.

The drop was largely due to net investor redemptions and fund liquidations of $35.9 billion during the month and combined with a reduction due to performance losses of $3.53 billion. Early estimates have the HFN Hedge Fund Aggregate Average -0.61% for February, but this figure will likely go lower as more funds report.

Taking into account internal estimates of where month end performance will likely settle, February 2009 should go down as the 5th highest level of hedge fund outperformance over equity markets in the last twenty years.

The Q4 2008 HFN Administrator Survey contains information on hedge fund and fund of funds assets under administration (AuA) from 60 administrators. Results detail total reported AuA, regional concentration, growth rates and top ten lists for more than 20 criteria.

Alex Akesson

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds

Tags: accredited-investors, administration services, alternative investment, aua, citco fund services, fund-assets, goldman-sachs, hedgeco, hfn, investment solutions, liquidations, outflow, outperformance, palm-beach, performance losses, redemptions, regional concentration, top ten lists

Tags: accredited-investors, ceo, diversified equity, equity-fund, ethical fund, hedge-fund-manager, hedgeco, inr, investment solutions, minimum-investment, mutual-fund, shariah board, sub-prime-crisis, taurus, waqar, wealth creation