Wed, Sep 17, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund industry surpasses $2 trillion milestone

Tuesday, April 19, 2011

Kenneth J. Heinz
Opalesque Industry Update - Investor inflows in 1Q11 highest since 3Q07

Broad-based asset gains across fund strategies and sizes

Total capital invested in the global hedge fund industry exceeded $2 trillion for the first time in its history, according to data released today by Hedge Fund Research, Inc. (HFR), the leading provider of hedge fund industry data. Total industry assets rose to $2.02 trillion, an increase of $102 billion in 1Q11, surpassing the previous record of $1.93 trillion, set in 2Q08. The current asset level reflects an increase of over 50 percent from the Financial Crisis low of $1.33 Trillion in 1Q09. Investors allocated $32 billion in net new capital in 1Q, the largest quarterly net inflow since 3Q07.

All strategy areas experienced inflows for the quarter, with the distribution of flows suggesting that allocators hold constructive yet dispersed views of the best strategic opportunities across the industry. Relative Value Arbitrage and Macro strategies posted the largest investor inflows, with each capturing approximately $12 billion. Relative Value Arbitrage strategies, encompassing exposure to fixed income, convertible securities and credit markets, have posted monthly performance gains in 26 of 27 months since December 2008. Event Driven strategies experienced the smallest capital inflows, attracting $2.2 billion, despite producing the strongest area of industry performance in both 2010 and 1Q11, with gains of +11.9 percent and +3.54 percent. Investors allocated $6.4 billion to Equity Hedge strategies in 1Q11, more than double the $2.6 billion of inflow from FY 2010.

Inflows strong across all firm capitalizations as risk tolerance returns Investors allocated new capital to funds of all asset tiers, reflecting a moderation of the capital concentration in the industry’s largest firms. Though firms with less than $250 million manage less than 4 percent of total industry capital, these received nearly 7 percent of 1Q inflows. Firms with capital in excess of $5 billion received just over half of the 1Q inflow, slightly moderating the 63 percent of total industry capital managed by these firms. Fund of Funds experienced an inflow of nearly $4.8 billion, the largest quarterly inflow since 2Q08.

Across the industry, nearly 72 percent of all hedge funds experienced capital inflows for the quarter, while nearly two-thirds of all funds have reached their high watermarks in the trailing 12 months.

“The growth of the industry to surpass significant threshold levels of both investor capital and fund performance validates that the hedge fund industry has completed its recovery from the financial crisis,” stated Kenneth J. Heinz, President of Hedge Fund Research (HFR). “The strategic and structural qualities of investor accessibility and transparency, which have defined the evolution of the industry in past two years, will serve as the primary catalysts for growth to surpass future milestones.”

Source

(press release)

bc

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  2. Investors looking at other sources for hedge fund-like returns[more]

    Komfie Manalo, Opalesque Asia: Investors who are always on the lookout for higher gains are looking at alternative sources of income, particularly exchange-traded fund industry that generates hedge fund-like returns, according to

  3. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Opalesque Exclusive: Old Hill Partners launches specialty finance fund[more]

    Bailey McCann, Opalesque New York: Asset-backed lending is starting to heat up again after a prolonged credit squeeze. The Financial Times reports that a record £18.9bn was borrowed from asset-based lenders in the three months to the end of June. Much of this lending is driven by advanc