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HFI: Global hedge fund assets bounce back to $1.8tn

Monday, March 08, 2010
Opalesque Industry Update - After a dramatic fall during the previous 18 months from the beginning of 2008, overall assets in global hedge funds staged a modest recovery during the second half of 2009, rising about 10% to reach $1.82 trillion. Over the full year, however, assets were up only very slightly – following a first half when strong performance could not offset continuing net outflows from redeeming investors.

The latest global asset figures mark an encouraging turnaround following a traumatic 18- month period when the industry contracted by more than 30%. However, they still leave the global asset total a long way short of the previous all-time high, measured at close to $2.7 trillion during 2007.

Including the increasing number of hedge funds, mostly in Europe, that are in an onshore UCITS III format – only those UCITS funds that use genuine hedge fund strategies and techniques – adds a further $30 billion-plus of assets, which takes the overall total to $1.85 trillion and slightly back above what it was a year ago.

As in previous years, the lion’s share of the industry’s assets are managed in the United States, with the 213 members of the Absolute Return Billion Dollar Club accounting for collective assets of $1.182 trillion, which was up a modest 4% from a year before.

Globally, there are also over 90 additional firms – mostly in Europe and Asia – that also run hedge fund assets of $1 billion or more, taking the total number of billion dollar firms around the world to 307 with combined assets of $1.497 trillion. The rest of the industry’s assets are managed by the many smaller firms that run hedge funds around the world.

New York remains by some distance the biggest hedge fund market centre in the world, with some 118 billion dollar firms, and still well ahead of London in second place which has 55 billion dollar firms. The share of assets of the top two centres – measured by the location of headquarters for each firm (given that many leading firms have offices in both centres) – is not much changed from a year ago.

Although the industry is geographically diverse, various other centres in the US – such as Connecticut, Massachusetts, California and Texas – also remain larger in asset terms than the other centres in Europe and Asia.

A full list of the billion dollar firms will be available as usual to subscribers via the annual HedgeFund Intelligence Global Review, which will be published at the end of March.

Neil Wilson, managing editor at HedgeFund Intelligence said:

“Our authoritative research has shown that the hedge fund industry is recovering from the financial crisis, but there is still a long way to go before global assets return to their previous peaks.”

“A clear growth area has been through UCITS III, which is still relatively small at this stage but growing fast and offering further evidence of the industry’s ability to innovate and rapidly evolve. Our new UCITS database is providing the first reliable means of measuring the size and performance of this increasingly important sub-sector.” Corporate website: www.hedgefundintelligence.com

- FG

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