23/11/2011 Author: Tony Griffiths

Hedge fund assets grow 3% despite performance dip

Hedge fund assets have grown by around 3% in the last six months, despite the industry-wide performance lag experienced during the summer months, HFMWeek research suggests.

The small advance, a gain of around $100bn, taking assets up to $3.34trn from $3.24trn, was calculated as part of HFMWeek’s latest Assets Under Administration (AuA) survey, a biannual countdown of the industry’s biggest hedge fund administrators.

The survey covers the six-month period from 1 May 2011 to 31 October 2011, including Q3 2011, the worst quarter for generalised hedge fund performance since the 2008 credit crisis. A total of 68 firms took part.  
 
“Encouragingly, capital remains stable with outflows really only targeting underperforming funds,” says William Keunen, global director at Citco Fund Services, which was once again revealed as the industry’s largest administrator. The firm’s single manager assets advanced 2%, up to $530bn from $520bn.  

With gains of almost $90bn, Northern Trust was far and away the survey’s biggest mover. The Chicago-based administrator’s 121% growth, owed largely to the summer acquisition of Omnium, saw it break into the list’s top-ten, rising from 14th to 7th place.

Thanks largely to growth at Northern Trust, the combined AuA total of the list’s top ten now accounts for its biggest percentage of overall assets, 71%, than at any time during the HFMWeek survey’s history.  

Six-month growth among the top-ten was at around 5%. Average growth across the rest of the 58 participating administrators was -2%.  

Other strong performers were BNY Mellon, up 11% to $348.3bn; HedgeServ, rising 30% to $91bn; and JP Morgan, who advanced 29% to $55.1bn.

Just missing out on the top-ten, New York-based HedgeServ, founded in 2007, has risen to eleventh place following a rise of 94% in 12 months.   

“Our growth continues to be fuelled by managers, and their investors, looking to upgrade their current administrator,” said Leo LaForce, the firm’s head of marketing and communications.