Hedge Fund Assets Up 13% In ‘09

Apr 12 2010 | 12:55pm ET

Hedge funds’ strong performance last year pushed the industry’s assets under management up 13% last year. But investors continued to flee funds of hedge funds.

Hedge funds managed US$1.7 trillion at the end of last year, according to International Financial Services London. And that firm’s hometown accounts for 20% of that total, more than double its share a decade ago, although it is unclear what effect higher taxes in the U.K. and tighter regulations in the European Union will have on the British hedge fund industry.

All of the increase in hedge fund assets are attributable to performance last year—the nearly 20% return of the average hedge fund offset a net outflow from the industry of US$85 billion.

The same could hardly be said for funds of hedge funds. Their combined assets are down to about US$500 billion, 17% less than at the end of 2008 and 40% less than their peak two years ago.

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