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Hedge funds to soar

Date: Wednesday, March 5, 2008
Author: Standard.com.hk/news

The global hedge fund industry will double in size to as much as US$4 trillion (HK$31.2 trillion) by 2012 as investors in the Persian Gulf and Asia seek to invest in new assets, the head of the world's largest publicly traded hedge-fund manager said yesterday.

"The key drivers are wealth and its location," Peter Clarke, chief executive of Man Group said. Man's assets are nearly 4 percent of the industry total of US$1.87 trillion.

Money flows into hedge funds will be driven by the Middle East's growing oil wealth and rising incomes of Asia, and investors in both regions are looking to diversify their holdings, Clarke said. Many of those economies are commodity- based and are seeking diversification, he added.

This will be a "seminal year" for hedge funds as equity markets are likely to be "directionless and volatile" while bonds and credit markets face difficult return expectations, he said.