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Canadian hedge funds could double AuM in next five years, says AIMA Canada

Date: Friday, December 16, 2011
Author: Charles Gubert, COO Connect

The Canadian hedge fund industry could double its assets under management (AuM) over the next five years, according to the chair of AIMA (Alternative Investment Management Association) Canada.

AuM in Canadian hedge funds is modest and currently stands at approximately $30 billion. This is a fraction of the estimated $2 trillion global AuM. Nevertheless, the region has doubled its AuM since 2008.

“I anticipate the Canadian hedge fund space will double again over the next five years. We have seen substantial AuM growth among our members,” said Gary Ostoich, chair of AIMA Canada and president of Spartan Fund Management, a Toronto-based multi-strategy hedge fund manager.

Canada has enjoyed steady growth in assets as many Canadian managers navigated through the financial crisis quite well. In addition, investors view managers in Canada as well-regulated. Canadian hedge fund managers are subjected to the same compliance requirements as mutual fund managers. Furthermore, they must undergo proficiency tests set by regulators and have adequate academic credentials to manage money.

“Stringent regulation and the conservative nature of Canadian financial institutions appeal to many investors. We are also seeing greater diversity of hedge fund strategies. Prior to 2008, the landscape tended to be long biased equity focused but now we are seeing more global macro, event-driven, credit and volatility funds. However, hedge funds generally are not focusing on exotic or esoteric products,” said Ostoich.