LONDON: In spite of the dislocation in global financial markets and tough times for alternatives investments, hedge fund assets have risen by 11% in the past six months while the industry’s combined assets under administration have reached the $4trn milestone, according to the 9th biannual HFMWeek Hedge Fund Administrators Survey.

“Given the volatility and background of current markets, an 11% rise is very positive,” said Charlie Kerr, publisher of HFMWeek.

Results showed single fund assets under administration (AUA) have grown from $2.5trn in April 2007 to $2.7trn as at November 2007. In the past year, these assets have increased by 29%, from $2trn to $2.7trn.

Meanwhile, fund of hedge funds (FoHF) reported steady growth as asset inflows jumped to $1.3trn from $1.1trn in the past six months.

The survey included figures and in-depth views from 66 hedge fund administrators, including two newcomers, and the recently consolidated IFS, a State Street Company, which merged with the Investors Bank & Trust; BISYS Alternative Investment Services and Citigroup, now called Citi’s Hedge Fund Services; and Bank of New York which merged with Mellon.

According to the majority of the administrators interviewed for the survey, the increase in hedge fund assets since April 2007 is a result of organic and strong performance from existing rather than new managers. Greater capital allocation from institutional investors over the last six months has also fuelled asset growth, especially in the FoHF space.

In the single manager space, growth has been strategy specific. “Our largest areas of growth within the single fund mangers have been with emerging markets, equity market neutral, event driven, global macro and multi strategy,” said Tim Howell, head of HSBC Securities Services.

However, asset growth among single managers has somewhat plateaued since the 7th biannual HFMWeek Hedge Fund Administrators Survey, conducted in November 2006, when the industry reported a 53% growth in single manager over a six month period.

But overall, the double digit returns in the single manager space is still encouraging considering managers had to contend with increased market volatility and headline risk following spectacular hedge fund blow ups in the last six months.

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