WEST PALM BEACH, FL (HEDGECO.NET) – Some members of the global hedge fund industry think that the growth projections for hedge fund assets are grossly underestimated.
According to forecast made by Platinum Capital Management, the global hedge fund industry will grow to about US$4 trillion by the year 2010. This projection actually doubles the current estimate of about US$2 trillion made by Putnam Lowell, a US based investment bank.
Craig Reeves, the managing director at Platinum said, “The hedge fund industry today is in the same position that mutual funds were in 1980, not regulated and growing at a ferocious pace.� He further explained that during the eighties, mutual funds were made up of �small boutiques� and by 1998; significant growth took place pushing its total assets from US$ 2 billion to about 3 trillion.
Another factor that would contribute to this explosive growth is the new assets coming from institutional investors such as pension funds and endowments. Currently the majority of investors in hedge funds are private clients. However, increasing numbers of institutional investors have begun to show an interest in hedge funds. Over time, the percentage of the overall portfolios dedicated to hedge fund managers should also increase; as many global pension schemes and other institutional investors continue to adopt hedge fund investment strategies.
Today the total hedge fund managed assets stand above US$1 trillion, the number of global hedge funds have grown to about 8,000, and many of these funds are domiciled in low tax-jurisdictions, most notably in the Caribbean, Dublin, and Luxembourg. .
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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