Hedge Fund Investors Ditching Single Manager Funds For Multi Manager Approach

by Phillip Morton, Investors Offshore.com

13 May 2005

Hedge funds of funds appear to be the new flavour of the month with alternative investors with new figures showing that fund of funds assets jumped 28% to $632.3 billion in the first quarter of 2005.

“Although asset growth slowed during the first quarter, the Fund of Funds industry was able to increase market share,” says Sol Waksman, president of The Barclay Group, which reported the figures.

“It appears that hedge fund investors are now opting for multi-manager approaches rather than single manager funds," he added.

Outside the Fund of Funds industry, hedge fund growth slowed in the first quarter. Assets rose just 2.3%, from $1.01 trillion to $1.035 trillion. This compares starkly to 2003 and 2004 when hedge fund assets under management more than doubled from under $400 billion to over $1 trillion.

Some hedge fund sectors have seen assets under management decline in 2005, such as Convertible Arbitrage, which dropped from $66.1 billion to $52.5 billion under management.

The Barclay Group is issuing its new report on Hedge fund of fund assets on a quarterly basis.

Recommended