Eurozone Hedge Funds To Shrink

Oct 29 2012 | 12:12pm ET

Some very unfavorable headwinds could lead to a markedly smaller European hedge fund industry, according to a new report.

Hedge funds in the eurozone—which, of course, excludes the continent's largest hedge fund centers, Britain and Switzerland—will manage as much as 12.5% less four years from now, Ernst & Young predicts in a new economic forecast for the region. Assets under management will fall between 1% and 3% every year until 2016, the accounting firm expects.

E&Y blamed both poor returns and the EU's impending strict new hedge fund regulations for the projected decline. "While the same pressures are being felt by hedge funds across the world, those in the eurozone and with larger exposures to the eurozone would be expected to struggle more," Julian Young, head of hedge funds in Europe, the Middle East, India and Africa, told Financial News.

According to E&Y, the eurozone hedge fund industry is already 17% smaller than it was five years ago, with assets down to €50 billion from €60 billion at the end of 2007.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...