Global Outlook 2024 Report


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Blackstone tops rankings as funds of hedge funds industry stalls at USD595bn

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The global fund of hedge funds industry, as represented by the largest players, saw a small decline in overall assets of 0.6 per cent in the first half of 2010.

This asset decline is in line with the average funds of hedge funds performance for the same period, according to the latest survey of the InvestHedge Billion Dollar FOHF Club.

The largest funds of funds – those with more than USD1bn in assets under management – now control a combined amount total of USD595bn in assets, according to the six monthly 2010 asset flow survey carried out by InvestHedge, a publication about investors in hedge funds.

The top ten, however, added USD6.4bn and grew by more than three per cent.

“Some of the savvier end investors are now choosing to allocate directly, but the role of the funds of hedge funds is not about to be eliminated. Funds of funds will simply no longer be paid for access to the brand names, and those that simply built businesses on an asset gathering model will soon find it impossible to justify their fees” says Niki Natarajan, editor of InvestHedge.

There are now 106 funds of hedge fund management companies in the InvestHedge Billion Dollar FOHF Club, with nine leaving the rankings in the first six months of 2010, including Ivy Asset Management, whose business is now being unwound.

Asset levels in the top fund of funds have now shrunk by more than 50 per cent from USD1.1 trn in the hands of 160 billion dollar funds of funds at their peak in June 2008.

Blackstone Alternative Asset Management’s assets have grown by 2.29 per cent in the first six months of 2010 to gain top slot in the rankings and become the largest funds of hedge funds in the world for the first time.

UBS Global Asset Management A&Q, with total assets of USD24.2bn, has dropped to third place. HSBS Alternative Investments is now number two with funds of hedge funds assets of USD26.8bn, although it has USD33.2bn in total in alternatives (including custody assets).

A year ago, Man Investments and Union Bancaire Privée were at second and fourth positions in the list respectively, but both firms have now fallen out of the top ten. Swiss based UBP, which now has USD16.1bn under management, is in 11th place, while the multi-manager business of Man Investments has fallen to 13th place. BlackRock Alternative Advisors, Morgan Stanley and GAM have re-entered the top ten.

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