Hedge fund assets back above 2006 levels: data

Date: Wednesday, October 12, 2011
Author: Tommy Wilkes, Reuters

Global hedge fund assets rose 6.7 percent to $2.16 trillion in the first half of the year as investors backed the bigger, established managers to steer them through volatile markets, data showed on Tuesday.

The rise in assets means the industry is now managing more than in 2006, but less than its pre-credit crunch peak in 2007, when assets briefly topped $2.6 trillion, according to the research by HedgeFund Intelligence.

Hedge funds have been slowly rebuilding their businesses after losing around 30 percent of their assets during and after the 2007 and 2008 financial crisis.

While the trend since then has generally been upwards, the bigger managers are enjoying almost all of the recent rise in assets, according to the data.

Funds that manage more than $1 billon grew their assets $150 billion to $1.85 trillion during the six months through June and the top 345 firms now manage some 82 percent of industry assets, the data shows.

The increase in assets comes despite many hedge funds struggling to turn a profit this year, with Hedge Fund Research's HFRI Fund Weighted Composite Index 4.74 percent lower in 2011.

Man Group Plc's computer-driven AHL fund has lost an estimated 1.5 percent, based on Monday's net asset value per share, while John Paulson's Advantage Plus Fund has tumbled almost 47 percent in 2011, two people who saw the numbers said.

The rise in total assets was not uniform across geographies.

Assets rose in the United States, which is still the largest center for hedge fund managers and sits on close to three quarters of total assets, as well as in Europe.

However, Asia saw its share drop 5 percent, HedgeFund Intelligence cited a survey from news and data provider AsiaHedge as showing.

Almost $100 billion is now held in hedge fund strategies only available under onshore UCITS-compliant format, wrappers which allow financial institutions to sell funds into any European Union country after approval from a single member state, HedgeFund Intelligence also said.