A close look at Institutional Investor's ranking of the top 100 hedge funds in terms of assets under management reveals how appealing such investments have become to institutional clients over the last decade.
Ten years ago, the top 100 hedge funds were managing a combined $260 billion in assets. Today the top five hedge funds in Institutional Investor's rankings alone come close to meeting that figure, collectively managing $221.6 billion at the start of 2011. As a whole, the research concludes the top 100 hedge funds were managing a staggering $1.21 trillion when the year began.
This data shows how far the hedge fund industry has come, morphing from a sector that generally only catered to high net worth clients and families, into an industry force that's now seen more along the lines of traditional asset managers by the institutional community.
From Institutional Investor:
The importance of brand-name recognition is evident in the Hedge Fund 100, where the five largest firms - Bridgewater, J.P. Morgan Asset Management, Man Investments, Paulson & Co. and Brevan Howard Asset Management - managed a staggering $221.6 billion in combined assets when this year began. That's nearly as much as the $260 billion in total assets that all the firms in the Hedge Fund 100 managed a decade ago in our inaugural ranking. All told this year's 100 biggest firms managed a total of $1.21 trillion at the start of this year, up 12 percent from the $1.08 trillion in assets that the firms on the 2010 Hedge Fund 100 had.As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio
What remains to be seen as the hedge fund brand wars unfold is whether managers will be able to deliver the kind of consistent, noncorrelated investment returns that investors have come to expect. Size has not always been kind to hedge fund firms. Managers that have risen to the top of the Hedge Fund 100 (think Farallon Capital Management and Goldman Sachs Asset Management) have had a tendency to fall down again.