Hedge Fund Assets Forecast To Grow Another 75% By 2008

by Carla Johnson, Investors Offshore.com

21 September 2005

New research shows that hedge funds are fast moving from the alternative to the mainstream investment sphere, and hedge fund assets will continue to grow apace, increasing by about 75% by 2008, according to an AFX News report.

The research by consulting firm Tower Group predicts that combined hedge fund assets, including both single manager funds and funds of hedge funds, will grow at a compound rate of 15% over the next three years. This means that by 2008, total hedge fund assets, which most estimates now put at a figure a little beyond $1 trillion, will have achieved 75% growth from current levels.

The new research backs up a recent study by Van Hedge Fund Advisors International LLC, which has predicted that hedge fund assets will continue to grow exponentially over the next ten years, reaching $6 trillion by 2015.

Van’s white paper forecast that, far from declining in the face of tighter regulation and slimmer returns, the hedge fund industry will continue to grow along a similar pattern to the mutual fund industry.

Among its findings, the study concluded that hedge fund assets will at least double to around $2 trillion by 2009, quadruple to $4 trillion by 2013 and sextuple to $6 trillion by 2015 - predictions that Van Hedge's chairman, George Van, believes are "conservative."

"Demand for hedge funds is at unprecedented levels and the worldwide capacity for hedge funds is growing," observed Mr Van.

"It took the mutual fund industry 66 years to attain $1 trillion in assets. It has taken hedge funds ten years less to reach the same level," he added.

Recommended