Global Hedge Fund AUM Slip In First Half of 2009

HedgeCo Archive - There has been a continuing decline in global hedge fund industry AUM during the first half of 2009, slipping a further 8.5% during the first half of 2009 to reach a total figure of $1.67 trillion by July, according to the latest research conducted by HedgeFund Intelligence (HFI).

From a peak figure of almost $2.7 trillion reached during the first half of 2008, global hedge fund assets have now fallen by some 38%.

In the first half of this year, however, performance was generally robust, with a median return from hedge funds globally of over 5%. This implies that net redemptions from hedge funds were continuing at a fairly rapid rate between January and June – with as much as 15% of investor money being pulled from the industry during the first half, and the further overall decline only partially offset by positive performance.

Neil Wilson, editorial director at HedgeFund Intelligence, said “Following a period of strong performance during the third quarter and plenty of anecdotal evidence that the majority of funds have begun to see net inflows again, we would not be surprised to see industry assets rise from the midyear levels by at least 10% before the end of
2009.”

During the first half, the number of firms that run hedge fund assets of $1 billion or more went down from 395 in the first half of 2008 to 311 at the beginning of 2009 and now to 291 at the mid-year point. The combined assets of these ‘billion dollar club’ firms also shrank further – from $1.46 trillion in January to $1.37 trillion by July.

New York remains by some distance the top global centre for hedge funds. Though New York’s total number of billion dollar firms slipped a little, from 123 to 118, during the first half, its share of assets remained almost unchanged at nearly 47%.

London is still comfortably the second biggest centre, but its number of billion dollar firms dropped more steeply in the first half – from 65 to 55, as several UK-based firms slipped below the $1 billion mark. London’s share of the global billion dollar club’s total assets thus slipped from over 17% to under 15%.

Connecticut is still in third place, with a share of assets slightly up at nearly 10.5%. The figures for other global hedge fund centres were largely unchanged, with centres on the increase this year including Hong Kong and Singapore.