Hedge Fund Assets Under Management Top $1 Trillion, Says Survey

by Phillip Morton, Investors Offshore.com

04 November 2004

The results of a new survey have shown that the hedge fund industry continues to grow at a dizzying pace, with assets under management now well over $1 trillion.

The half-yearly survey of the global hedge fund administrator market published by Hedge Fund Manager magazine has revealed that hedge fund assets under administration have grown by 33.5% to reach $1.5 trillion, with assets under management in single hedge funds now also over $1 trillion.

Most industry sources had been estimating assets under management at somewhere between $800 billion and $900 billion.

Among other findings, it is thought that 2.5% of global institutional and high-net-worth assets, a pool of money said to be worth $40 trillion, are invested in single hedge funds, up from less than 1.25% in 2001.

On average, hedge funds participating in the survey experienced 25% growth in assets, whilst some smaller funds reported growth levels in excess of 50%.

Interestingly, HFR found that the United States has lost some ground to Europe in the last six months in terms of where hedge fund managers are based.

The research showed that 53% of hedge fund managers were based in the US, a drop of 3%, whilst 40% were based in Europe, an increase of 2%. The numbers based in Asia remained level at 5% despite significant growth in the hedge fund industry in that region in recent months.

HFR put like-for-like asset growth at 22% over the last six months despite poor returns this year, and argued that hedge funds are now accepted as a mainstream investment for many institutional investors such as pension funds.

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