Despite a rough 2011, hedge funds continue to attract investors.
Indeed, powered by a rebound by some firms, assets managed by the industry have once again soared past trillion. PerTrac, a provider of analytics, risk and communications software for hedge funds, reminds us that big funds still tend to dominate. Single-manager hedge funds with greater than billion under management account for a mere 3.9 percent of funds, but they control about 60 percent of the total single-manager hedge fund assets.
According to the study, 322 single-manager hedge funds reported having AUMs in excess of billion in 2011, for a total of .08 trillion in assets. Despite their dominance, there was only a 1.4 percent year-over-year increase in the assets of billion-dollar-plus funds in 2011 based on those that reported their results. It concludes that "the flight to size continues for hedge fund investors. Investors continue to view larger hedge funds as a better, safer bet even though industry data, including our own, indicates that smaller funds have generally outperformed larger ones."
This confirms the general view that limited partners are paying more attention to non-performance related issues, such as third-party administration and compliance issues.
- here's the release
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