U.S. Dominates Hedge Fund Industry

Sep 19 2013 | 10:38am ET

U.S.-based hedge funds have bounced back from the financial crisis better than those in other regions and account for 73% of total hedge fund industry assets, according to new research from data provider Preqin.

U.S. funds have added $150 billion to their assets under management year to date, thanks in large part to performance, although Preqin points to some “significant” commitments to U.S.-based funds this year. By way of comparison, Europe-based hedge funds have added $33 billion to their AUM year-to-date.

New York remains the center of the hedge fund universe, London is second and Connecticut third. Ten states are home to 95% of all U.S.-based hedge fund assets: New York, California, Connecticut, Massachusetts, Illinois, Texas, New Jersey, Minnesota,  Pennsylvania and Florida.

U.S.-based funds of hedge funds dominate that segment of the industry, managing $508 billion or 65% of all FoF capital.

If you're not yet convinced of U.S. hedge fund hegemony, Preqin also notes that U.S.-based investors account for 55% of all institutional capital invested in hedge funds and U.S.-based funds have posted a net return of 13.54% over the past 12 months compared to a global benchmark of 11.09%.

“The U.S. is the undeniable center of the hedge fund industry, with more hedge fund managers and investors than anywhere else in the world,” said Preqin's Amy Bensted in a statement. “Although hedge funds have had a rocky few years globally, the recovery of the  U.S. hedge fund industry has been strong. In addition, U.S.-based institutional investors represent a vital source  of capital for hedge fund managers. These investors recognize the value that hedge funds can add to their portfolio, and have begun to allocate significant sums to hedge funds to complement their traditional equity and fixed-income portfolios.”


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...