Global Hedge Fund Assets Slip To $1.67 Trillion In The First Half Of 2009

Press Release

Global hedge fund assets slip 8.5% to $1.67 trillion in the first half of 2009


Continuing decline in global hedge fund industry AUM during the first half of 2009




But indications of a reversal in the trend from Q3 09




HFI estimates that global industry AUM could rebound by 10% or more in second half




New York remains biggest centre for hedge funds, London still in second place

Assets in global hedge funds slipped a further 8.5% during the first half of 2009 to reach a total figure of $1.67 trillion by July, according to the latest research conducted by HedgeFund Intelligence. This drop during the first half of the year continued a decline that had begun during 2008, when there had been a particularly steep fall during the second half of the year. From a peak figure of almost $2.7 trillion reached during the first half of 2008, global hedge fund assets have now fallen by some 38%. During the second half of last year, in the midst of the global financial crisis, the fall in industry assets had been hastened by widespread negative performance – which, along with net redemptions, had also accounted for a substantial proportion of the overall decline. In the first half of this year, however, performance was generally robust, with a median return from hedge funds globally of over 5% (and higher than that on a mean average basis). This implies that net redemptions from hedge funds were continuing at a fairly rapid rate between January and June – with as much as 15% of investor money being pulled from the industry during the first half, and the further overall decline only partially offset by positive performance. By July, however, it had already become increasingly clear that the rate of decline had been slowing towards a stop – and since then that this massive trend of net outflows has petered out and probably begun to reverse. Many major fund groups have been reporting higher asset figures in the past two months due to both strong performance and/or renewed net inflows. Neil Wilson, editorial director at HedgeFund Intelligence, added: “Following what was a period of strong performance during the third quarter and plenty of anecdotal evidence that the majority of funds have begun to see net inflows again, we would not be surprised to see industry assets rise from the midyear levels by at least 10% before the end of 2009.”

Press Release: Global hedge fund assets slip 8.5% to $1.67 trillion in the first half of 2009 Date: 2 October 2009 Page 1 of 3

During the first half, there was a further trimming down in the ranks of the bigger firms in the industry – with the number of firms that run hedge fund assets of $1 billion or more slipping further from 395 in the first half of 2008 to 311 at the beginning of 2009 and now to 291 at the mid-year point (de-duplicating for related groups which run funds from more than one centre). The combined assets of these ‘billion dollar club’ firms also shrank further – from $1.46 trillion in January to $1.37 trillion by July. New York remains by some distance the top global centre for hedge funds. Though New York’s total number of billion dollar firms slipped a little, from 123 to 118, during the first half, its share of assets remained almost unchanged at nearly 47%. London is still comfortably the second biggest centre, but its number of billion dollar firms dropped more steeply in the first half – from 65 to 55, as several UK-based firms slipped below the $1 billion mark. London’s share of the global billion dollar club’s total assets thus slipped from over 17% to under 15%. Connecticut is still in third place, with a share of assets slightly up at nearly 10.5%. The figures for other global hedge fund centres were largely unchanged, with centres on the increase this year including Hong Kong and Singapore. For clarity: these statistics include single-manager hedge fund assets only. They do not doublecount money allocated to hedge funds via funds of funds. Statistics on funds of funds are collected and published separately by InvestHedge.

THE $1.67 TRILLION INDUSTRY: WHERE THE ASSETS ARE MANAGED

Press Release: Global hedge fund assets slip 8.5% to $1.67 trillion in the first half of 2009 Date: 2 October 2009 Page 2 of 3

THE GLOBAL BILLION DOLLAR CLUB – BY LOCATION OF MANAGER

City/State NY London CT CA MA Hong Kong TX Tokyo IL Sydney Paris Singapore NJ Hamilton Stockholm MN WI Mebourne GA Sao Paulo Toronto Jersey Limassol Rotterdam Oslo Geneva Edinburgh FL MD PA VA Total*

Country USA UK USA USA USA Hong Kong USA Japan USA Australia France Singapore USA Bermuda Sweden USA USA Australia USA Brazil Canada Channel Islands Cyprus Netherlands Norway Switzerland UK USA USA USA USA

Number of Firms 118 55 29 22 12 8 7 5 5 4 4 4 4 3 3 3 3 2 2 1 1 1 1 1 1 1 1 1 1 1 1 305

AUM $Bn 642.86 203.84 143.84 80.95 84.73 11.22 23.61 5.29 26.59 14.06 10.11 6.65 15.80 8.13 11.43 12.20 16.40 1.10 7.29 7.30 1.82 1.24 1.83 8.06 1.96 2.54 1.10 1.36 3.90 10.00 4.09 1371.31

% by AUM 46.88% 14.86% 10.49% 5.90% 6.18% 0.82% 1.72% 0.39% 1.94% 1.03% 0.74% 0.48% 1.15% 0.59% 0.83% 0.89% 1.20% 0.08% 0.53% 0.53% 0.13% 0.09% 0.13% 0.59% 0.14% 0.19% 0.08% 0.10% 0.28% 0.73% 0.30% 100.00%

*After de-duplicating for firms which operate $1 billion funds from more than one centre

** ENDS ** About HedgeFund Intelligence HedgeFund Intelligence is the leading provider of news, analysis and performance data on the global hedge fund industry. The company provides dedicated information on US, European, Asian and African singlemanager hedge funds as well as on hedge fund investors worldwide. For more information, please contact: Neil Wilson, Editorial Director, HedgeFund Intelligence +44 (0) 20 7779 7359 / [email protected] US media: Armel Leslie, Walek & Associates: +1 212 889-4113 / [email protected] Rest of world media: Paul Farrow, Merlin PR +44 (0) 20 7653 6620 / [email protected] Press Release: Global hedge fund assets slip 8.5% to $1.67 trillion in the first half of 2009 Date: 2 October 2009 Page 3 of 3