By Nell Mackenzie
LONDON (Reuters) – An important players now make up about three-quarters of the hedge fund enterprise, as a result of the likes of multi-strategy firms have taken up the lion’s share of the enterprise, said a Monetary establishment of America report seen by Reuters on Tuesday.
Hedge funds that deal with larger than $5 billion in belongings grew their enterprise share to 73% by the highest of the second quarter of 2024, up from 65% in 2018, in accordance with the report, which was despatched to customers on Monday.
This acquired right here on the expense of mid-sized firms between
$1 billion and $5 billion in dimension, which seen their proportion of enterprise money shrink 6% within the an identical timeframe.
Multi-strategy firms look like a “principal driver,” said the report which was the outcomes of a survey of 160 hedge fund consumers managing roughly $680 billion that embody pensions, family locations of labor, sovereign wealth and funds of hedge funds.
Almost half of those surveyed said they deliberate to every improve the money they allocate to hedge funds and the number of hedge funds of their portfolios.
Nonetheless the roughly 6% that plan to take money out of the sector largely said they may choose a novel type of funding class like personal equity, or personal credit score rating.
The bigger the investor, the stickier their leaving plans, each completely or partially, the survey confirmed.
Two-fifths of those surveyed agreed with their hedge funds that effectivity should surpass a positive threshold – or hurdle worth – sooner than the equipment of fees.
These thresholds, known as “hurdle fees”, included the risk-free worth, an agreed worth or used equity indices as a benchmark, said the report.
Excessive investor points included hedge funds crowding into the an identical trades, not holding enough draw again protections and geopolitical risks, the survey said.
