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Alternative Market Briefing

Concentration of assets in top hedge funds increasing - Professor Naik, London Business School

Tuesday, September 21, 2010

From Kirsten Bischoff, Opalesque New York:

The news that assets are returning to the hedge fund industry has been of little comfort to small and mid-sized fund managers, as many will attest they have seen very little of these inflows. Instead, it has become painfully apparent that hedge fund investors are only looking to allocate to the biggest, most established names in the business. While some may attribute this to a reaction in the aftermath of industry losses in 2008, gated funds, or the unraveling of frauds such as Madoff and Petters, in fact the concentration of assets amongst a small group of fund managers has been snowballing for some time.

Narayan Naik Professor at the London Business School and Director of the Hedge Funds Centre, recently spoke with Matthias Knab of OpalesqueTV about hedge fund industry trends he and his colleagues have tracked in the eight years since they started monitoring the major hedge fund databases.

When we tracked the concentration of assets across fund managers from the year 2000 through December 2009 we found that the concentration was continuing to increase over that time, growing from the top 10% of managers overseeing 75% of the hedge fund industry's assets to the top 10% of managers overseeing 85% of the hedge fund industry's asset......................

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