The funds of hedge funds industry shrank a further 13.5% in the first half of 2009, with the previous freefall broken by relatively strong positive performance of 5.12% to the end of July, according to the latest survey of the InvestHedge Billion Dollar Club.
The largest funds of fundsthose with more than USD 1 billion in assets under management now control a combined amount of USD 613 billion in assets, according to the six-monthly 2009 asset flow survey carried out by InvestHedge, the leading publication about investors in hedge funds.
For the first time, however, this number has been added to the assets of all the many other non-InvestHedge Billion Club members also in the InvestHedge Database to produce a total of USD 735 billion, the first ever definitive total figure for the global funds of hedge funds industry.
If the global hedge fund industry is estimated at close to USD 1.7 trillion in total assets then funds of funds still allocate about 40% of that total.
A lithe funds of funds industry is rebounding from the crises of the last 18 months, says Niki Natarajan, editor of InvestHedge. It is leaner, fitter and only those that have shown themselves to have managed the different challenges with a defined, repeatable and explainable process are set to survive and win the institutional money that is certain to come back. The industry is in the process of re-emerging as the tool of choice for investors to allocate assets to absolute returns funds according to their guidelines, time frames and liabilities. The re-born industry will be more in line with investors.
There are now 117 funds of hedge fund management companies in the InvestHedge Billion Dollar Club, with 18 leaving the rankings in the first six months of 2009. Over the last 18 months since the start of the sub-prime mortgage crisis, some 48 groups fell out of the rankings after shutting their businesses or the assets falling below the USD 1 billion level. Over 18 months, the industry lost nearly 40% of its assets, equivalent to nearly USD 400 billion.
UBS Global Asset Management A&Q with total assets of USD 31 billion retained the top slot in the rankings. If the assets of UBS Wealth Management USA are added in, UBS has a total of USD 33.3 billion, making it the largest fund of fund management group in the world.
With USD 26.4 billion, Man Investments is now the second largest, having formally combined the assets of its RMF Investment Management, Glenwood Capital Investments and Man Global Strategies units.
Blackstone Alternative Asset Management has jumped to third place with USD 25 billion in assets.
Top 10 largest Funds of Funds
UBS Global Asset Management A&Q
Man InvestmentsBlackstone Alternative Asset ManagementUnion Bancaire PrivéeHSBC Alternative InvestmentsGoldman Sachs Asset ManagementGrosvenor Capital ManagementPermal Investment ManagementGAM Multi-ManagerPacific Alternative Asset Management Co.
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