2011 Key Trends in Fund of Hedge Funds

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Introduction

The global fund of hedge funds industry witnessed some very strong trends over the last decade, in
terms of size and population as well as different aspects of the industry’s make-up. After growing at
an incremental pace in the 2003 to mid-2008 period, the size of the industry reached US$826.2 billion
in March 2008. However excessive losses and widespread redemptions, triggered by the global
financial crisis and some high profile frauds, reduced total assets under management substantially
and by July 2009 industry assets fell to US$433.7 billion.

Figure 1 shows the industry growth in assets under management and fund population since 2000.

Figures 1 - 2: Industry growth between 2000 and 2011

4000 900
3500 800

3000 700

AUM (US$ billion)
Number of Funds

2500
600

500
2000
400
1500
300
1000
200
500
100
0 0

2000 2002 2004 2006 2008 2010

No. of Funds AUM

Since 2009, the industry assets have 480.0 

posted a slight growth, however most of
that has been through performance
rather than net positive asset flows. The
Eurekahedge Fund of Funds Index was 460.0 
up 9.57% and 4.48% in 2009 and 2010
respectively and remains in positive
territory in 2011. 440.0 

The assets under management have

steadily crept up to reach US$467 billion
as at end-March 2011, despite a… 420.0 
Dec‐09 Mar‐10 Jun‐10 Sep‐10 Dec‐10 Mar‐11

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May 2011 1