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By Beverly Chandler, Opalesque London:
According to Preqin, the provider of information for the alternatives industry, the hedge fund of funds arena has finally turned the corner after the disastrous recent few years it has endured. Writing in Preqin’s monthly newsletter, Spotlight, Joanna Hammond found that the size of hedge funds of funds within their database of 535 such funds varied considerably from the smallest at less than $1 m up to the largest with $35 bn.
However, the firm notes that assets in general have shifted over the last year, to a state where we have more fund of fund firms with less than $250m, a shift from 28% of the database to 35% in 2010. The report notes: "The most noticeable shift is the decline in the proportion of managers with assets of $2-4.9 billion. The fall in the average fund of funds size over the period was $570 million, from $2.75 billion in 2010 to $2.18 billion in 2011. This is less than half the average fund size in 2009, which was $4.78 billion."
However, rumours that the hedge fund of fund industry was dying off are proving to be just that – rumours. "Recently, the sector has seen performance improving, new investors entering
the arena, and significant improvement in investor demand
following wide scale changes in the industry (including increased
transparency and due diligence measures). Consequently, we have
seen new allocations to funds of hedge funds and aggregate assets
under management have grown slightly between 2010...................... To view our full article Click here
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