Friday, 25 July 2014
Last updated 33 min ago
May 30 2014 | 8:44am ET
Hedge funds with at least $1 billion in assets manage some 90% of the industry’s total assets, according to a new report from Preqin.
The “billion-dollar club” now counts 505 of the 4,621 hedge fund managers worldwide, with combined assets of $2.39 trillion—out of the $2.66 trillion managed by all hedge funds. Leading this elite group are the 25 largest hedge funds in the world, each of which manage more than $20 billion and have $834 billion between them.
Bridgewater Associates remains the world’s largest hedge fund by a wide margin, with $157.2 billion, followed by AQR Capital Management ($53.3 billion) and Och-Ziff Capital Management ($43.5 billion). Brevan Howard Capital Management has $40 billion in assets, BlueCrest Capital Management $35.8 billion, Standard Life Investments $33.1 billion, D.E. Shaw & Co. $32 billion, BlackRock Alternative Investors $31.3 billion, Viking Global Investors $28.1 billion and Man Investments $26.7 billion.
The world’s hedge fund capital, New York, is also the center of the billion-dollar club, with 174 members managing $938 billion. London is the second most-favored home of the largest funds, with 80 managing $346 billion, although Connecticut’s 35 billion-dollar funds have more combined assets—$400 million—due to Bridgewater’s presence in Westport.
California (34 funds with $159 billion), Massachusetts (29 with $190 billion) and Illinois (18 with $96 billion) follow. Hong Kong boasts 13 billion-dollar club members with $28 billion in assets, New Jersey 10 with $65 billion, Texas nine with $53 billion, São Paulo, Brazil, six with $31 billion, Paris five with $28 billion and Singapore five with $15 billion. Some 25 countries are home to at least one manager with $1 billion or more in assets, including Australia, Germany, Ireland and Japan.
The billion-dollar hedge fund club is increasingly being fed by another billion-dollar club: investors with at least $1 billion invested in the asset class. Led by pension funds, sovereign wealth funds and asset managers, there are now 203 such investors with $650 billion invested in hedge funds.
“The increase in hedge fund assets is being driven by allocations from the largest investors in hedge funds, those which currently allocate more than $1 billion to the asset class,” Preqin’s Amy Bensted said. “With these investors allocating approximately $650 billion to hedge funds, an 18% increase from this time last year, it will be important for hedge fund managers to attract inflows from these prominent institutional investors.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…