A study conducted by Preqin reveals that the top 100 hedge funds manage about 61 percent of the hedge fund industry’s total capital. Preqin says in its May edition of Hedge Fund Spotlight that hedge funds currently have about $2.3 trillion of assets under management, of that $1.4 trillion is managed by the top 100 hedge funds.
The report says that the largest 100 hedge funds have a mean year of establishment of 1994, indicating that they are far more experienced than that of other h-funds. Excluding the top 100, all other hedge funds have the mean year of establishment of 2002. Preqin’s head of Hedge Fund Products, Amy Bensted said that hedge fund industry began in 1949, and has grown significantly since its inception.
Abacab Fund Sees Mispricing In Options As Black-Scholes Has Become “Inadequate”
Abacab Asset Management's flagship investment fund, the Abacab Fund, had a "very strong" 2020, returning 25.9% net, that's according to a copy of the firm's year-end letter to investors, which ValueWalk has been able to review. Commenting on the investment environment last year, the fund manager noted that, due to the accelerated adoption of many Read More
The trend is expected to continue because investors who commit a large amount of capital to hedge funds always look for managers with significant assets under management. The study found that there are 176 investors that allocated $1 billion or more to hedge funds, of them 44 percent are pension funds. On an average, investors allocating above $1 billion require the hedge funds to have at least $818 million AUM before putting their money in. Despite looking for significant AUM in hedge funds, 81 percent of the investors allocating $1 billion or more said they will consider emerging managers.
75 Percent of Top 100 Hedge Funds American
The mean AUM of the top 100 hedge funds is a little under $13.9 billion. Seventeen of the 100 largest hedge funds have AUM of more than $20 billion. About 75 percent of the of the top 100 hedge funds are based in the United States, while 19 percent of them have their base in Europe.
Bridgewater Associates by far remains the largest hedge fund with $144 billion AUM, followed by the UK-based Brevan Howard Asset Management, which has $40 billion AUM. Among the top ten hedge funds, six are from the United States while the other four are from the UK.
The hedge fund industry assets are slowly returning to pre-crisis levels. The study suggests that investors are more interested in allocating capital to established hedge funds that have successfully weathered the financial crisis.