Sun, May 29, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Average AUM of mid-sized fund of hedge funds managers up 10% in 2011

Friday, February 10, 2012
Size mattered in the fund of hedge funds sector in 2011, as large managers saw AUM fall while those in the mid-market enjoyed an average 10% increase, the latest Preqin research shows.

In total, 24% of fund of hedge funds managers reported an increase in AUM during the course of 2011, an increase of seven percentage points on the proportion that enjoyed an increase between 2008 and 2009.

Managers with $10bn or more under management endured an average 2.1% decrease in AUM in 2011, suggesting that while investors are keen to invest with managers with a sizeable level of capital, they are moving away from those at the top end of the spectrum.

A quarter of managers reported a decrease in AUM in 2011, so it is clear that it was very much a year of mixed fortunes for the sector, as investors remained cautious in the uncertain economic environment.

Funds of Hedge Funds: Facts

  • Total assets grew in the past 12 months and have now reached around $945bn – up from $910bn at the start of 2011.
  • The proportion of fund of funds managers with less than $250mn in AUM continued to increase in 2011 and now stands at 38%.
  • The average AUM of a fund of hedge funds manager fell at a slower rate in 2011 than in previous years, from $2.18bn to $2.09bn.
  • Large fund of hedge funds managers – those with over $10bn in AUM – account for 5% of all managers, but 45% of industry assets.
  • Funds of hedge funds remain attractive to smaller investors looking to make their first commitments to the asset class.

2011 was a difficult year for the hedge fund industry due to poor performance and investor caution. However, institutional investment in hedge funds is predicted to increase during 2012, meaning that fund of hedge funds managers need to react to investor demand if they are to be on the receiving end of a proportion of these assets.

Investor demands for better fee structures, increased transparency and flexibility in their underlying investments is likely to lead to a surge in niche strategies and innovative products as managers look for ways to attract institutional capital ahead of single managers.

If managers react to the changing demands of investors, the fund of hedge funds industry has the potential to grow further, and for AUM to reach the $1tn mark once more.

Hedge Fund Spotlight

Press Release

bm

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. Performance - Hedge fund ETFs take a battering, Have long-short credit funds delivered?[more]

    Hedge fund ETFs take a battering From ETFStrategy.co.uk: It was a blow for the hedge fund world when Hillary Clinton’s son-in-law Marc Mezvinsky announced he would be closing his Greek-focused fund after it plummeted in value by 90%, just two years after it launched. For passive investor

  2. Ares Capital to buy American Capital in $3.4 billion deal[more]

    From PIOnline.com: Ares Management's business development company Ares Capital Corp. is buying troubled BDC American Capital for $3.43 billion, said a joint news release by the BDCs and another release by Ares Management. Ares Capital Corp.'s assets are expected to grow to about $13.2 billion when t

  3. Launches - Man Group and American Beacon launch new emerging debt fund, Nikko AM launches new Japan equity UCITS fund[more]

    Man Group and American Beacon launch new emerging debt fund American Beacon Advisors, an experienced provider of investment advisory services to institutional and retail markets, launched the American Beacon GLG Total Return Fund today. The Fund became effective May 20. The America

  4. Emerging markets hedge funds perform strongly, but capital base erodes[more]

    Komfie Manalo, Opalesque Asia: Latin American Emerging Markets and Russian hedge funds lead industry gains in the first months of 2016, posting strong performances through April as global and EM equity, commodity and currency markets surged in recent weeks following steep losses to begin the year

  5. Americas - Australian banks sending U.S. hedge funds broke, Ryan Puerto Rico ‘rescue’ bill could be windfall for hedge funds[more]

    Australian banks sending U.S. hedge funds broke From SMH.com.au: US hedge funds are not having the best of years. Profits are hard to find, they're underperforming and the punters are losing patience, withdrawing US$15 billion ($20.8 billion) in the March quarter. They're expected to wit