The hedge fund industry has now reached USD3.16 trillion in assets as of the end of Q1 2015, but a growing proportion of these assets are concentrated among a small pool of large managers, according to Preqin’s latest hedge fund spotlight.
The “USD1 billion Club”, which now includes 570 managers, represents 11 per cent of the total 5,122 single-manager hedge fund managers across the globe. But these firms command a total of USD2.78 trillion of industry capital, which amounts to 92 per cent of the total assets in hedge funds.
Some 22 fund managers currently handle USD20 billion or more in assets under management, and collectively control USD790 billion in assets. Members of the Club that manage between USD1 billion and USD4.9 billion collectively control USD892 billion in assets, or 28 per cent of entire industry assets.
At least 27 per cent of funds run by members of the Club are equity strategies (41 per cent for managers with between USD1 billion and USD4.9 billion in assets). For managers with USD20 billion or more in assets, almost a quarter of their funds are multi-strategy funds.
For members of the Club with USD20 billion or more in assets, the average year of establishment is 1992, highlighting the long track record for a large number of these managers. For managers with between USD1 billion and USD4.9 billion, the average year of establishment is 2001.
A total of 202 members of the USD1 billion Club are located in New York, and manage over USD1 trillion between them. London is the second most notable location of managers in the Club, with 83 headquartered there managing USD363 billion in assets.
Bridgewater Associates still commands the largest amount of assets, with a total of USD169.5 billion in assets under management. AQR Capital Management follows this with USD64.9 billion in assets.
“The USD1 billion Club, those hedge funds with at least USD1 billion or more in assets under management, have continued to grow over the past twelve months, both in terms of the assets they command and their influence on the hedge fund industry,” says Amy Bensted, Head of Hedge Fund Products at Preqin. “This group of 570 hedge funds now accounts for 92 per cent of the total assets managed by hedge funds.
“Within this group of elite fund managers, many have steadily grown their assets over decades demonstrating a consistently strong track record over many market cycles. Some newer entrants have either demonstrated superior performance in a shorter term to accumulate their assets or have spun out of existing USD1 billion Club firms to attract significant pools of capital to their new ventures.”