Sun, Mar 25, 2018
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Mid-sized hedge funds achieve higher returns in 2013 - Preqin

Thursday, March 27, 2014
Opalesque Industry Update - New research from Preqin’s Hedge Fund Analyst reveals that mid-sized hedge funds were the best performers in 2013 compared to other fund sizes. Mid-sized hedge funds with assets under management (AUM) of $100-499mn and $500-999mn posted 12-month average returns over 2013 of 13.79% and 13.71% respectively, beating large funds (AUM of $1-5bn) and small funds (AUM of less than $100mn), which posted 12.08% and 11.45% respectively.

Other Key Facts:

  • As fund size increases the spread of performance between the 25th and 75th percentile returns narrows; the largest funds show the smallest dispersion of returns, however these returns tend to be lower than funds with less than $1bn in assets under management.
  • A lower proportion of mid-sized hedge funds saw losses in 2013 compared to large and small hedge funds. Among mid-sized hedge funds with $100-499mn and $500-999mn in AUM, only 12% and 8% of these funds respectively saw losses in terms of cumulative returns over the year.
  • Top performing funds with assets of less than $100mn have shown the largest variation in risk-return profile over the three-year period ending 31 January 2014, with these funds exhibiting higher returns and higher volatility than their larger counterparts.
  • 27% of mid-sized hedge funds with AUM of $100-499mn posted returns in excess of 20% in 2013, higher than the proportion of larger hedge funds (AUM of $1-5bn) that achieved this (19%).
  • 48% of hedge fund investors surveyed stated that returns are a key factor when looking at a fund manager and in particular 21% of investors surveyed by Preqin stated the potential for better returns from smaller managers is a key reason for preferring funds with less than $1bn in assets.
  • Investors are looking across a wide range of fund sizes in 2014; funds in the group $1-5bn are the most sought, with 57% of institutional investors seeking funds of that size in 2014, followed by 52% and 47% of investors looking at funds between $100-499mn and $500-999mn respectively.


“Much of the capital inflow into the hedge fund industry over the past few years has been to just the largest funds, with investors looking for the proven track record and experienced investment teams that these larger hedge fund managers often provide. However, our analysis shows that investors are looking at a variety of fund sizes for investment in 2014 and different investors have different return objectives and risk appetite from their hedge fund investments. Performance remains a key factor in the selection process and Preqin’s latest research demonstrates that it is not always the largest funds that are providing the best performance in terms of risk and return.

As funds become larger, the distribution of returns among the best performing funds moves towards the lower end of the return spectrum. Funds in the midsized groups i.e. those from $100-499mn or from $500- 999mn, have shown the highest mean and median returns in 2013. The size range $500-999mn had the lowest proportion of funds suffering a loss in 2013, and the longer term return and volatility characteristics of these funds are similar to funds with assets of more than $1bn. Therefore, those investors which are looking to move away from investing in just the largest funds, but without taking on too much volatility, may choose to look towards investing in those funds with more than $500mn in assets.” Amy Bensted, Head of Hedge Fund Products - Preqin


Press Release

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. John Paulson, once the industry's largest hedge fund, to return some investors' money[more]

    Komfie Manalo, Opalesque Asia: John Paulson is reported to be retuning some of his investors' money as a number of his hedge funds continue to suffer setbacks, reports

  2. Institutional Investors - Overdrawn pension fund scores gains[more]

    From Investments in big banks, pawn shops and rolling papers helped boost public safety workers' underfunded pensions this past calendar years, according to newly released figures. After recording middling returns in recent years, the Police & Fire Pension Fund (P&F) notched

  3. Activist Investors - The seven most undervalued stocks in Larry Robbins' portfolio, Stamford hedge fund still seeking shakeup of Taubman board[more]

    The seven most undervalued stocks in Larry Robbins' portfolio From ...On February 14th, Larry Robbins' firm Glenview Capital Management filed its quarterly Form 13F regulatory filing. The firm's stock portfolio totals $18.5 billion with 58 positions according to the latest

  4. Hot hedge fund loses 21% after bet on volatility goes wrong[more]

    From In December, Shahraab Ahmad shared with his hedge fund clients the principle that helped him trounce peers for two turbulent decades: steer clear of the crowd. He'd turned $50 million into an operation with more than $700 million over three years and delivered market-beating retu

  5. Opalesque Exclusive: Northern Trust builds on blockchain-backed private equity solution[more]

    Bailey McCann, Opalesque New York: Private equity clients at Northern Trust can now carry out audits of private equity lifecycle events directly from the blockchain. Northern Trust, working with PwC and other audit firms in Guernsey, has added this feature to its existing solution set for private