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us hedge fund sector rebounds

Solid performance and inflows have bolstered assets in US hedge funds by $150bn this year, following a difficult period for returns and fundraising, a report finds


According to data provider Preqin, the US hedge fund industry, which represents some $1.74trn in assets under management – almost three-quarters of the global total – has recovered more strongly than other regions.

Much of this year’s growth can be explained by performance, Preqin says, with US funds outstripping their global peers year-to-date, as well as over the past 12 months, three years and five years, on an annualised basis.

In addition, the report notes that US-based institutional investors, who account for more than half of total institutional capital invested in hedge funds, have made substantial commitments to US strategies in 2013.

“Although hedge funds have had a rocky few years globally, the recovery of the US hedge fund industry has been strong,” wrote Amy Bensted, head of hedge fund products at Preqin. “In addition, US-based institutional investors represent a vital source of capital for hedge fund managers.

“These investors…have begun to allocate significant sums to hedge funds to complement their traditional equity and fixed income portfolios.”

Other findings of the report:

  • 5% of assets managed by US hedge fund managers are structured as European Ucits;
  • 51% of US-based hedge fund assets are managed in New York; and
  • Pension funds account for 50% of the capital invested in hedge funds by US institutions, excluding funds of hedge funds.

As Expert Investor Europe reported last month, strong demand for Ucits-structured hedge fund strategies has pushed total assets under management in such vehicles beyond €100bn.

A PDF of the Preqin report can be downloaded from the company’s website, here.