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.