FoHF assets stay level despite performance dip

Date: Wednesday, December 7, 2011
Author: Tony Griffiths, HFMweek

Total fund of hedge funds (FoHF) assets have levelled out in the past six months, despite a summer of industry-wide performance woes that many predicted would cause a retreat in overall capital.  

According to HFMWeek’s 17th biannual Assets under Administration (AuA) survey, total FoHF assets were $1.11trn as of the end of October 2011 – the same as at the end of April.

Citco Fund Services retained its position as the industry’s biggest FoHF administrator, with flat six-month growth seeing it stay at $130bn in AuA. Its lead at the top has been cut to under $20bn however, following gains of $12.6bn at second-place Bank of New York Mellon.  

Notable movers in the 63-firm list include: Bank of New York Mellon – up 13% to $110.6bn from $98bn; State Street – now at $70.1bn following a 15% rise; and, in joint tenth-place, HedgeServ, which has moved to $39bn following a 50% advance.    

BNP Paribas Securities Services and UBS Fund Services moved down the list, with six-month retreats of -12% and -11% respectively.

As well as stagnation in industry assets, survey interviewees pointed to a development and expansion in admin services, prompted in part by a period in which FoHFs have evolved to meet investor demands.

“We have not seen appreciable growth in traditional FoHF assets,” said William Keunen, global director at Citco. “Overall AuM generally reflects circumstances where capital flows have been stable and performance has remained almost flat.

“However, many FoHFs are growing their business by adding customised funds, advisory mandates and managed account platforms.”