European Hedge Fund Asset Survey 2006
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European hedge fund assets pass USD 400bn
The European hedge fund industry enjoyed dramatic growth in the first half of 2006, with total assets under management growing to over $400 billion. The growth in overall industry assets – to $401 billion at the end of June – represents an increase of 23% from $325 billion at the beginning of 2006 and of 44% since June 2005, when total assets were just $280 billion.
The increase in assets comes despite a spell of mediocre performance by many funds during the volatile markets in May and June and suggests that the pace of new investor inflows into hedge funds, particularly from the institutional investment community, is quickening.
The asset growth results from a mixture of fund performance during the period and new investor inflows – notably from institutional investors like pension funds and local authorities, who are allocating more significant portions of their portfolios to hedge funds, either directly or through funds of funds. In addition, the industry’s overall growth continues to be supported by the record numbers of new hedge funds being launched in Europe.
The most rapid asset growth in recent months has been seen at the largest hedge fund groups. The combined assets at the top 25 European hedge fund groups totalled almost $180 billion, or 44% of the industry’s total assets, at the end of June.
The survey also shows the overwhelming dominance of London as the leading centre of the European hedge fund industry. Almost 80% of the assets managed in the European industry were run by UK-based firms as of June this year – up from 76% a year before.
Top 10 Hedge Fund Firms by Assets
AS AT JUNE 2006
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2006
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Company
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USD bn
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1
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16.2
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2
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15.1
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3
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13.0
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4
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10.9
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5
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10.0
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6
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9.2
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7
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The Children's Investment Fund |
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8.0
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8
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7.9
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9
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7.4
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10
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7.1
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United States
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