Gwyn Roberts

25/05/2011 Author: Gwyn Roberts

Editor's view: 26 May 2011

Over the past two years, HFMWeek’s biannual AuA survey has depicted an industry in the ascendant. Our latest despatch shows this upswing is unabated. If anything, the process has accelerated.

With assets hurtling upwards – the industry has broken $3trn and reached a new historic high – the sheer blur of growth will cause many to question where the bulk of money – beyond better performance – has come from.

Bank cap intro events, a great measure of investor interest, provide a clue to this. In the last week or so, a number of prime brokerages have told HFM that the presence of funds of hedge funds (FoHF) at these events has dropped from 60-70% of the audience to, in some cases, below 40%. The empty seats invariably being filled by US pension funds – or their consultants.

Our own data bears this out. Funds of hedge funds have now fallen to 25% of the industry’s total assets – hedge funds and FoHFs assets combined now stand at $4.35trn – leaving other ‘direct’ investors to claim responsibility for the industry’s resurgence. This, according to many of the admins who took part in the survey, is most frequently pension money.

The development certainly doesn’t sound the death knell of FoHFs – they are now just a smaller piece of a larger pie – but it does show how diversified this industry has become. A good sign for future growth. 

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