56% Of FoHF Assets Come From Institutional Investors

Date: Wednesday, September 19, 2007
Author: Hedge Fund Daily

Institutional investors account for more than half of all money allocated to funds of hedge funds, according to Pensions & Investments. In what is believed to be the first survey of its kind, P&I found that of the $542 billion of assets managed by FOHF managers as of June 30, $306 billion, or 56.5%, came from institutional investors with 23% ($124 billion) from U.S. institutions. Leading with $51 billion in FOHFs under management for all clients was UBS’ alternative and quantitative investment unit in Chicago, followed by London-based Man Investments ($47.9 billion) and New York-based Permal Group ($31 billion). Rounding out the top five were GAM with $24.7 billion and Credit Suisse at $24 billion. Focusing solely on managing funds of hedge funds for institutions, Blackstone Alternative Asset Management topped the list with $19.5 billion, followed by Grosvenor Capital Management with $19.3 billion (as of March 31), and Man Investments, ($17.9 billion), Bank of New York Mellon ($17.2 billion) and UBS ($16.5 billion). Blackstone also was No. 1 among FOHF managers of   U.S. institutional investors, but in this smaller subset, it was followed by Pacific Alternative Asset Management and Arden Asset Management both with $6.8 billion, and AIG Investments with $5.6 billion. According to the survey, despite the fact that IIs account for more than half of total FoHF assets, the firms with the most FOHF money actually recorded smaller percentages from institutional investors. Only 32% of UBS’ fund of hedge funds assets were from IIs, while that percentage stood at 37% for Man, 16% for Permal and 15% for GAM (Credit Suisse didn’t provide a breakdown, says P&I). “The big winners have been the independent, boutique specialty managers,” Paul Schaeffer of SEI Investment Managers Services, told P&I. “The large, traditional asset management companies are conspicuously absent from these rankings.”