Sunday, 1 March 2015
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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.”
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…