Assets continued to flow into the largest fund of hedge fund groups at a rate of 12% for 2005, despite widespread pessimism that asset flow trends were likely to reverse, according the latest survey of the InvestHedge Billion Dollar Club.
And despite returns averaging just over 7% for the year, the global fund of funds industry still grew by more than $72 billion – a figure not nearly as impressive as the $166 billion growth in 2004.
The largest funds of funds – those with over $1 billion under management – now control a combined amount of more than $631 billion in assets under management, according to the end-2005 asset flow survey carried out by InvestHedge, a publication that tracks hedge fund investors.
“Low volatility was the most frequently blamed factor for another lacklustre year in terms of performance,” said Niki Natarajan, editor of InvestHedge. “The long awaited asset flow slowdown has finally taken place, but not across the board, proving that the right infrastructure, resources, range of products, distribution as well as performance, will continue to win assets.”
Of the 134 groups in the InvestHedge Billion Dollar Club, which includes funds with assets over $1 billion, UBS Global Asset Management A&Q claimed the top slot as the largest fund of funds group in the world, breaching the $30-billion mark. GAM, which is now part of the Julius Baer Group, saw outflows of more than $1.4 billion and slipped to third place with slightly more than $23 billion under management, primarily because its product range has been closed for most of the year and not able to take in new inflows.
Union Bancaire comes in second with $24.98 billion and Permal Group ranks fourth with $21.30 billion in assets under management.