Industry Updates

HFI: Global hedge fund assets edge up slightly to $1.87tln

Wednesday, October 13, 2010

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Opalesque Industry Update -

- Slowdown reflects flat performance and neutral inflows and outflows from investors in the first half

- New York still the leading centre, followed by London, but Asia and emerging markets on the rise

- Total assets still well short of the peak in 2007

After a rebound of some 10% buoyed by strong performance during the second half of 2009, assets in the global hedge fund industry edged up at a much slower pace during the first half of 2010. According to the latest research by HedgeFund Intelligence, global assets were up a modest 2% during the first half of this year to reach a total of $1.866 trillion by the beginning of July.

The latest numbers on global assets came following a period of relatively flat performance during the first half across the hedge fund industry – which implies that any new inflows of assets must have been more or less evenly matched by the pace of investor redemptions. Industry assets remain a long way below their historic high of over $2.65 trillion set during 2007 before the global financial crisis took hold.

As in previous years, the lion’s share of global assets are managed in the United States, with the 217 members of the Absolute Return Billion Dollar Club alone accounting for combined assets of over $1.2 trillion. Globally, there are now 302 firms that run hedge fund assets of $1 billion or more, representing a combined total of $1.535 trillion – a slightly higher proportion than at the beginning of the year, and continuing a trend whereby assets have become ever more heavily concentrated among the bigger firms. The top 10 firms alone now control 15% of the global total.

New York remains the biggest single centre of the industry, followed by London which is still in second place. Assets in standard European hedge funds did not rise at all in the first half, though there was an increase in onshore UCITS III-compliant hedge funds to reach nearly $35 billion in Europe (and nearly $50 billion in all) – which are not included in the totals here.

The rising centres include places in Asia such as Hong Kong, where the number of firms in the Billion Dollar Club jumped from 6 to 10 in the first half of the year; and in Latin America, where there are now five firms with $1 billion or more in either Sao Paulo or Rio de Janeiro.

THE GLOBAL BILLION DOLLAR CLUB, July 2010

Location	AUM	Number of Firms	% total assets	% total funds
NY, USA	706.44	124	46.03%	39.49%
London, UK	238.82	52	15.56%	16.56%
CT, USA	168.1	25	10.95%	7.96%
CA, USA	70.03	16	4.56%	5.10%
MA, USA	89.48	12	5.83%	3.82%
Hong Kong	13.47	10	0.88%	3.18%
TX, USA	25.59	8	1.67%	2.55%
NJ, USA	25.32	5	1.65%	1.59%
Sydney, Australia	19.67	5	1.28%	1.59%
MN, USA	16.53	5	1.08%	1.59%
Singapore	6.15	5	0.40%	1.59%
IL, USA	22.05	4	1.44%	1.27%
Paris, France	15.39	4	1.00%	1.27%
Hamilton, Bermuda	11.22	4	0.73%	1.27%
Stockholm, Sweden	14.34	3	0.93%	0.96%
WI, USA	9.85	3	0.64%	0.96%
Rio de Janiero, Brazil	5.13	3	0.33%	0.96%
Toronto, Canada	4.14	3	0.27%	0.96%
Tokyo, Japan	3.92	3	0.26%	0.96%
GA, USA	11.84	2	0.77%	0.64%
PA, USA	11.79	2	0.77%	0.64%
São Paulo, Brazil	10.31	2	0.67%	0.64%
Other	35.28	14	2.30%	4.46%
Total	1534.86	302*	100%	100%

*De-duplicated to account for groups with more than one official location / Source: HedgeFund Intelligence Database

The figures shown here are for single-manager hedge funds only. They do not include or double-count money allocated to hedge funds via funds of funds. Assets in funds of hedge funds are tracked separately by InvestHedge.

(press release)

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