Hedge Funds No Longer The Domain Of The HNWI

by Phillip Morton, Investors Offshore.com

09 March 2009

An absolute majority of all assets under management by hedge funds and funds of hedge funds globally are from institutional investors, according to the Alternative Investment Management Association (AIMA).

The new research from AIMA defines institutional investors as pension funds, university endowments, foundations and governmental authorities. Pension funds account for a third of assets from institutional investors.

The figures were produced by AIMA’s research department and were based on extensive consultation with some of the association’s 1,200 corporate members in 43 countries.

Tom Kehoe, Research Manager of AIMA, explained: “Traditionally, high net worth individuals accounted for most of the assets under management (AUM) by the hedge fund industry globally but institutional investors have been steadily increasing in significance in recent years and we think they now account for an absolute majority of AUM. Pension funds account for about a third of that, or one-sixth overall. These figures are estimates, but they are informed by all the data at our disposal.”

Andrew Baker, Chief Executive of AIMA, said: “These figures demonstrate that the hedge fund industry plays an extremely important role globally for the institutions that look after everyone’s pensions and savings. Hedge funds and funds of funds are skilled at managing risk and delivering stable returns, which institutions need at this time more than ever. They offer an extension of investment capabilities to institutional investors through their skills and expertise.”

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