Top 350 hedge funds control almost half industry

Date: Tuesday, March 4, 2008
Author: FT.com

From the FT: The top 350 hedge funds control almost half the $2,100bn industry, a new study shows. The study, to be released today by Pertrac Financial, a software company, found 350 of the 15,250 hedge funds it identified had more than $1bn, up from 250 last year, and that among them they controlled $950bn. The biggest hedge fund managers have scored successes with institutional investors helping big funds grow bigger.

At the same time, the environment has been getting tougher for new launches, with Pertrac confirming that the number of start-up funds had dropped sharply in 2006, with only three-quarters as many start-ups as the previous year. The firm tracks new launches a year in arrears because many new funds wait a year before reporting.

Meredith Jones, managing director, said the slowdown in launches was a sign of the industry maturing. "In addition, the decrease in new fund launches reflects the asset flow trends in the industry since, in many cases, assets flow to larger established hedge funds and funds of funds, which is somewhat of a deterrent for new entrants into the marketplace."