UK Dominates European Hedge Fund Industry

May 7 2014 | 9:10am ET

The UK generally—and London in particular—remains the undisputed center of the European hedge fund industry, according to new data from Preqin.

UK-based hedge funds now manage $423 billion—more than 10 times the assets managed in any other European country. The bulk of those assets—90%—is managed from London.

The majority of hedge fund managers setting up business in recent years have established themselves in the UK and the country was home to 50% of all known European hedge fund launches between January 2013 and April 2014.

The UK saw 38 new hedge fund managers set up business in 2013, in contrast to the rest of Europe, where the number of new firms entering the market fell from a peak of 35 in 2006 to 17 in 2013.

Preqin's Amy Bensted said the slowdown in Europe “can be partially attributed to the AIFMD regulation within Europe, which is deterring some prospective new firms setting up a hedge fund business in the region.”

Although the UK has seen more hedge fund managers set up business in the country than in the rest of Europe the number of hedge fund launches in each region has remained similar—in 2013 there were 91 hedge funds launched by UK-based managers, compared to 90 hedge funds launched by managers based in the rest of Europe.

Despite the growth in the number of new firms entering the market, the total number of fund launches in Europe has fallen from a peak of 282 in 2010 to 181 in 2013.

Swiss managers had the second highest growth in assets in Europe between January 2013 and April 2014, gaining an additional $10 billion.

In terms of hedge fund AUM, Sweden runs a distant second to the UK with $34 billion, Switzerland has $31 billion, France has $20 billion and the Netherlands $9 billion.

Sweden was, however, home to the most successful fundraising: Brummer & Partners' Canosa fund has raised over $1 billion since launching in March 2013.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...