Canadian hedge funds are experiencing unprecedented growth in several niche areas, reports blackenterprise.com, and foreign based funds are also becoming more active in Canadian markets.
While Canada’s hedge fund sector has been overshadowed by its American peers, the Canadian market has grown significantly in the past four years.
The consensus estimate for Canadian hedge fund assets is about $30bn, blackenterprise.com said. Toronto-based RBC Capital Markets estimates there are around 250 single manager funds, most of which are small, with only about 20 funds managing more than $100m. Funds of funds and structured notes are thought to account for the majority of the allocations.
“The Canadian market has been relatively attractive to smaller funds,†Colin Bugler, RBC’s head of equity finance, told blackenterprise.com. “It is hard to run big convertible arbitrage and risk arbitrage funds with multi-billion dollar mandates in Canada. We tend to see a lot of $50-100m funds. We also see buyside firms taking on the hedge fund sector with long/short strategies and more market neutral strategies.â€Â
