COMBINED ASSETS OF BILLION-DOLLAR HEDGE FUNDSNEARLY FLAT IN FIRST HALF OF 2010,
AR
MAGAZINE SURVEY FINDS
ASSETS FAR BELOW 2008 PEAK; TOP FIRMS GROW LARGER
New York, NY, September 30, 2010 – With hedge funds turning out small profits in 2010, it’sno surprise that the amount they manage has stagnated. Hedge funds operating in the Americashold a combined $1.202 trillion, 1.7% more than these funds managed at the beginning of theyear, according to latest Billion Dollar Club,
AR
Magazine’s survey of American hedge fundsmanaging $1 billion or more.Globally, hedge fund assets amount to $1.9 trillion, up slightly from the $1.82 trillion managedat the beginning of the year. Global hedge fund assets totaled $1.72 trillion on July 1, 2009.Full results are available online atwww.absolutereturn-alpha.com.As of July 1, there were 217 hedge fund firms with assets of $1 billion or more. That’s comparedwith 213 funds holding a combined total of $1.182 trillion at the beginning of the year, accordingto the survey, which appears in the October issue of
AR
.Despite last year’s recovery, hedge fund assets are down 28% from their market peak in July2008, when the biggest 268 American firms managed $1.675 trillion.Asset growth has been hampered by this year’s lackluster performance as well as investor redemptions. U.S. hedge funds gained just 2.7% in 2010 through the month of August, accordingto the AR Composite Index. That result is due largely to a tough second quarter; in May alone,three-quarters of all hedge funds posted losses.“The broader market’s erratic behavior has challenged hedge funds, as many managers arehaving a tough time posting substantial returns,” said Amanda Cantrell, managing editor of
AR
.“Though many hedge funds lost money and suffered redemptions in the first half of the year, the biggest firms in the industry still managed to increase assets, if only slightly.” Nearly half (46%) of the $1 billion-plus hedge funds in the Americas either lost assets or stayedflat in this year’s first half, according to the survey. The bulk of this year’s growth in assets wasexperienced by the biggest firms. Assets managed by firms with more than $5 billion haveincreased by 1%, to $851 billion, since the beginning of the year. These largest firms, which
number 72, control 71% of the assets in the Billion Dollar Club, a percentage that has notchanged in the past year.Bridgewater Associates emerges as this year’s biggest winner. With $50.9 billion as of July 1,Bridgewater is not only the largest American hedge fund firm but also notched the biggest gainin assets, adding $7.3 billion – or 16.74% – since January. The strong performance of Bridgewater’s Pure Alpha Fund II powered much of this growth.The number two spot goes to JPMorgan Asset Management, which had $41.1 billion as of July1. That’s $2.7 billion more than the firm managed on January 1, with growth attributed toinflows into JPMorgan’s fund business. JPMorgan’s Highbridge Capital Management unit lostassets, falling to $16.46 billion from the $17.9 billion in managed in January.Paulson & Co. takes number three with $31 billion, $1 billion less than in January 2010.In dollar terms, the assets of D.E. Shaw Group fell more than any other firm this year. D.E. Shawmanaged $17.8 billion as of July 1, down $5.8 billion from its January 1 total. D.E. Shaw has lostmore than one third of its total hedge fund assets under management in the past year. Most of that loss occurred in the second half of 2009, when the firm paid out redemptions after havingsuspended investor withdrawal requests in 2008.American hedge funds control the bulk of industry assets worldwide. By far, New York remainsthe central hub, accounting for $714.77 billion, or 59% of assets managed by the Billion Dollar Club.TOP TEN HEDGE FUNDS IN THE AMERICAS
FirmAUM ($ billions)
Bridgewater Associates50.9JPMorgan41.1Paulson & Co.31Soros Fund Management27Och-Ziff Capital Management Group 25.3BlackRock22.83Angelo, Gordon & Co.22.68Baupost Group22Farallon Capital Management20King Street Capital Management19.3
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AR BIllion Dollar Club Remains Flat in First Half of 2010
The assets of Americas-based hedge funds held steady in the first half of 2010.
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