WEST PALM BEACH, FL (HEDGECO.NET) – The 2004 Global Alternative Investment Management conference, [GAIM] will focus among other matters on the question of growth within the global hedge fundindustry, as more investors continue to flock to hedge funds in larger numbers. In Europe, growing interest in hedge fund investment strategies, has lead the organizers of the European GAIMconference to move the annual hedge fund event from its traditional host city of Geneva, to Lausanne instead, as the number of individuals seeking to attend the conference has outgrown the Genevaconference facility.
Last year the agenda for the GAIM conference centered on hedge fund asset flows coming from institutional groups such as pension plans and endowments, this year however the theme of the show will focus on sustainability of growth occurring within the hedge fund industry. The conference was scheduled for June 8-10, 2004.
Some hedge fund market participants and analysts have raised issues on whether the current growth trends within the hedge fund industry could be sustained over time. According to news reports, the chief executive officer at Man Group, Stanley Fink while optimistic about the future prospects of the hedge fund industry has also raised concerns about potential problems, which could arise out of the prevailing growth trends in the hedge fund industry. Stanley said, �The industry can’t grow at 20 percent a year. It will mean too much money will be going through and that will reduce the alpha, which will then reduce demand.�
Such concerns about capacity constraints point to the difficult months of April and May 2004, and the negative results posted by the average hedge fund. Last month according to hedge fund tracking firm, Hennessee Group, hedge funds lost 0.37 percent after slipping 1.04 percent in April. Overall, hedge funds are still up 1.82 percent in the first five months of the year; such performance shows a divergence from the double-digit returns posted by the average hedge fund in recent times.
There is also an added issue that some managers launch and close their funds quickly; some analysts think such constraint problems will eventually be resolved when a shake-out occurs in the industry, leading some to predict a hedge fund bubble. However such a bubble has been predicted since the collapse of Long Term Capital Management and it has not happened yet. Instead hedge fund assets have continued to grow from one year to another. In 2004, the total global assets managed by hedge funds have surpassed US $1 trillion mark.
A more likely scenario some argue is that the growth rate of global hedge fund assets will slow down considerably; such school of thought dispels the hedge fund bubble theory.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com.
