• Hedge funds’ assets up 13 per cent in 2009, fund of hedge funds’ assets down 17 per cent
• Annual performance return totalled 19 per cent, best hedge fund performance in a decade
• London holds steady as second largest centre for managers of hedge funds with 20 per cent of assets
Hedge funds’ assets increased by 13 per cent in 2009 to $1.7 trillion, according to International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide. Its annual Hedge Funds report indicates that growth of assets is likely to continue in 2010 barring further economic turbulence.
Redemptions continued for the second year running, albeit at a slower pace. The 19 per cent return in 2009, the best hedge funds’ performance in a decade, more than made up for the $85bn in net outflows. The asset raising environment gradually improved during 2009 with a return to net asset inflows during the second half of the year. Around 60 per cent of hedge fund assets with redemption restrictions at the start of the year were returned to standard liquidity terms by the end of 2009 according to the report.
The fund of hedge funds industry has been particularly affected by the economic downturn of the past two years and reputational damage resulting from the Madoff fraud. Assets of fund of funds totalled $500bn at the end of 2009, down 17 per cent from the previous year, and over 40 per cent below the peak seen two years earlier.
The number of hedge funds totalled around 9,400 at the end of 2009, a reduction of more than 1,000 from the peak seen two years earlier. New hedge fund launches however exceeded the number of liquidations in the second half of the year.
IFSL estimates that 41% of global hedge fund assets were managed from New York in 2009, down from 52% at the start of the decade. London’s 20% share of the global total was unchanged from the previous year. Europe has more than doubled its share of the global total since the start of the decade. The hedge fund industry is however concerned that the European Commission’s proposed Directive on Alternative Investment Fund Managers may by create major difficulties in the medium term for non-EU funds and managers in accessing the EU market.
Marko Maslakovic, Senior Economist at IFSL, said: “The 1,000 hedge funds located in London managed more than three-quarters of European based hedge funds’ assets. The structural advantages which have long attracted hedge funds to London include its local expertise and the proximity of clients and markets. London is also a leading centre for hedge fund services such as administration, prime brokerage and custody”.
• Annual performance return totalled 19 per cent, best hedge fund performance in a decade
• London holds steady as second largest centre for managers of hedge funds with 20 per cent of assets
Hedge funds’ assets increased by 13 per cent in 2009 to $1.7 trillion, according to International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide. Its annual Hedge Funds report indicates that growth of assets is likely to continue in 2010 barring further economic turbulence.
Redemptions continued for the second year running, albeit at a slower pace. The 19 per cent return in 2009, the best hedge funds’ performance in a decade, more than made up for the $85bn in net outflows. The asset raising environment gradually improved during 2009 with a return to net asset inflows during the second half of the year. Around 60 per cent of hedge fund assets with redemption restrictions at the start of the year were returned to standard liquidity terms by the end of 2009 according to the report.
The fund of hedge funds industry has been particularly affected by the economic downturn of the past two years and reputational damage resulting from the Madoff fraud. Assets of fund of funds totalled $500bn at the end of 2009, down 17 per cent from the previous year, and over 40 per cent below the peak seen two years earlier.
The number of hedge funds totalled around 9,400 at the end of 2009, a reduction of more than 1,000 from the peak seen two years earlier. New hedge fund launches however exceeded the number of liquidations in the second half of the year.
IFSL estimates that 41% of global hedge fund assets were managed from New York in 2009, down from 52% at the start of the decade. London’s 20% share of the global total was unchanged from the previous year. Europe has more than doubled its share of the global total since the start of the decade. The hedge fund industry is however concerned that the European Commission’s proposed Directive on Alternative Investment Fund Managers may by create major difficulties in the medium term for non-EU funds and managers in accessing the EU market.
Marko Maslakovic, Senior Economist at IFSL, said: “The 1,000 hedge funds located in London managed more than three-quarters of European based hedge funds’ assets. The structural advantages which have long attracted hedge funds to London include its local expertise and the proximity of clients and markets. London is also a leading centre for hedge fund services such as administration, prime brokerage and custody”.
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