Hedge fund industry grows 34%, says survey

In its tenth annual hedge fund manager survey, Hennessee found that in the last year the total number of hedge funds increased 23%, from 5,700 to 7,000 funds. However, the industry still represents less than 2% of world financial markets.

Growth, said Hennesse, was down to manager performance and new capital inflows. Since 1987, hedge funds have generated an annualised return of 15.34% with 40% less volatility than the Standard & Poor’s 500 return of 12.11% over the same time period, added the group.

The survey also found that 58% of hedge funds are registered with a regulatory agency.

Fund of funds were found to be the fastest-growing source of capital for the industry, with an 810% increase since January 1997, from $21 billion to $191 billion. Pension fund investment directly into hedge funds has also increased significantly, up 453% in the same period from $13 billion to $72 billion.

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