Hedge fund assets continue to grow at a rapid clip, but the bulk of the money is going to a handful of the world’s largest hedge fund firms, according to the 13th annual Institutional Investor’s Alpha Hedge Fund 100 ranking. At the start of 2014, this group managed $1.51 trillion, up almost 14 percent from early 2013, when they had $1.33 trillion.
This trend started after the financial crisis of 2008, but it shows no signs of slowing down: Over the past two years, assets of the top 100 hedge fund firms have surged nearly 25 percent. The top 100 firms now account for more than half of total industry assets, and their share has been increasing.
“Most of the new money that the big funds are getting is from public pension plans,” says Maneck Kotwal, an investment officer at the New Jersey Division of Investment. Kotwal notes that pensions now account for a significant share of assets in hedge funds — which explains the flight to brand-name firms. “Because of their size and being in the public eye, pension funds gravitate to the larger firms,” he says. “It’s the same reason they used to buy IBM.”
Still, a handful of major firms closed some funds to new investors last year, while others returned significant sums of capital to investors in 2013.
To find out how we selected the ranking, see the methodology description on the right.
In the 2014 Hedge Fund 100, we provide each manager’s total hedge fund assets under management as of January 1, 2014, unless otherwise indicated. Where possible, we also show assets at the individual fund level, with net returns for two years and since inception, and 2013 fund capital as reported last year. The ranking last year was based on capital as of January 2, 2013, unless otherwise noted.
Asset totals reflect internally run, single-manager hedge funds and separate accounts, including long-only funds that charge hedge-fund-style fees; they exclude funds of hedge funds, overlay accounts, funds managed by third parties, mutual funds and traditional long-only money, dynamic money market funds, assets in collateralized debt and bond obligations, private equity and venture capital. We gathered data through questionnaires completed by hedge fund managers, supplemented by extensive staff research. Senior Editor Jane B. Kenney compiled the ranking with the assistance of Senior Contributing Writer Stephen Taub. To request a questionnaire for next year’s Hedge Fund 100 ranking, please e-mail your contact details to hf100@iimagazine.com.