Reuters – Weak average returns slowed the growth of assets managed by the world’s largest fund of hedge fund groups to around 12 percent last year from 42 percent in 2004, trade publicationInvestHedge said on Monday.
The survey showed assets managed by the 134 largest fund of hedge funds — those with more than $1 billion under management — rose by $72 billion to $631 billion last year.
Of the $72 billion, around 7 percent — the average return produced by fund of hedge funds — was probably due to investment gains, according to InvestHedge.
By contrast, in 2004 the assets managed by the 119 largest fund of hedge funds rose by $166 billion to $559 billion.
Funds of hedge funds normally invest in portfolios of hedge funds for institutions such as pension funds. They do the due diligence and monitor the business and investment risks.
“Those 134 (fund of hedge fund) groups … now account for close to half of all the assets invested in hedge funds, if one assumes that about $1.3 trillion is invested in hedge funds globally,” InvestHedge said in a statement.
