Sun, Oct 22, 2017
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. Regulatory - David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge, Carried interest tax: How much does it matter?, Odey sees 'terrifying' mix in MiFID, tapering, asset values, Hedge funds come together to share cost of MiFID and research, SEC turns up the heat on U.S. investment advisers, India's Sebi asks hedge funds to report investments in commodity derivatives[more]

    David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge From CNBC.com: David Stockman is warning about the Trump administration's tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off. Stockman, the R

  2. North America - Puerto Rico rejects loan offers, accusing hedge funds of trying to profit off hurricanes[more]

    From TheIintercept.com: Puerto Rico has rejected a bondholder group's offer to issue the territory additional debt as a response to the devastation of Hurricane Maria. Officials with Puerto Rico's Fiscal Agency and Financial Advisory Authority said the offer was "not viable" and would harm the islan

  3. Investing - WPP targeted by short-selling American hedge fund, Sun co-founder sells secretive hedge fund on big chip trade[more]

    WPP targeted by short-selling American hedge fund From Cityam.com: An American hedge fund has mounted a bet against WPP, the world's largest advertising group, with a trade worth almost £90m. Lone Pine Capital has built a short position worth 0.51 per cent of the FTSE 100 company,

  4. Hedge funds up as industry adjusts to rising rates[more]

    Komfie Manalo, Opalesque Asia: Hedge funds have reshuffled their portfolio after nearly four weeks of rising rates as the Lyxor Hedge Fund Index was up +0.2% from 19 September to 26 (+1.1% YTD), fuelled by strong results of global macro funds, Lyxor Ass

  5. Manager Profile - How the world's hedge fund king used 'idea meritocracy' to become a billionaire[more]

    From Forbes.com: In 1982, Ray Dalio made what he calls the biggest mistake of his life. He made a bet that there would be an economic collapse stemming from a debt crisis. And he was wrong. He lost money. He lost his client's money. He had to let people go from his firm and borrow money from his dad