Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


01:46 PM
Connect Directly

Hedge Fund Assets Climbed During First Half of 2012: Study

PerTrac says investors are showing more interest in alternative investments, and a growing tendency to invest directly in hedge funds.

Hedge fund assets grew during the first half of the year, as single-manager hedge funds managed to withstand market swings, economic uncertainty and regulatory reform to grow their assets by 5.23 percent to $1.89 trillion, according to a study by analytics provider PerTrac.

The study also found that the fund of hedge funds model continues to fall out of favor, with the amount of money invested in these vehicles shrinking by 4.9 percent to $495 billion. Yet despite this drop, the total amount of money invested in hedge funds – whether in a single-manager fund or fund of hedge funds – rose to $2.3 trillion over the first six months of the year, PerTrac said.

Meanwhile the number of hedge funds reporting to databases climbed by 4.6 percent to 14,013, with the lion's share of that growth coming from single-manager funds, PerTrac added. The firm also said its findings suggest that asset allocators are showing an increased interest in alternative investments, and are demonstrating a rising tendency to invest directly in hedge funds.

"Although challenging economic conditions have impacted hedge funds' performance during the last few years, investors still see their long term value and are giving them a significant place in their portfolios," said PerTrac president Brendan Dolan.

The study also found that when investors pour money into hedge funds, they usually favor the biggest funds. Firms overseeing more than $1 billion saw their assets climb to about $1.15 trillion from $1.08 trillion at the end of 2011.

From PerTrac: •

The "billion dollar club" reigned supreme within funds of hedge funds as well. 48.7% of assets were controlled by the 3.24% of firms that each managed more than $1 billion.

• CTAs posted healthy gains in assets of 6.05% this year, bringing their total to $438 billion under management at the end of first half of 2012. The total number of CTA funds rose by 1.26% from the end of 2011 to 1,528.

• Forty-five CTAs reported managing in excess of $1 billion and they accounted for 78.1% of that sector's assets under management.

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio

Register for Wall Street & Technology Newsletters
7 Unusual Behaviors That Indicate Security Breaches
7 Unusual Behaviors That Indicate Security Breaches
Breaches create outliers. Identifying anomalous activity can help keep firms in compliance and out of the headlines.