Kings of the Jungle
Hedge funds set another record for 2007 growing assets by over 54% in 2007. Hedge funds now manage $1.87 trillion and they gained $194.5 billion in new assets in 2007 as compared to 2006 when $126.5 billion was raised. Hedge Fund Research also reports that Hedge Fund of Funds added $59.2 billion in assets this last year brining their total to $798.6 billion in assets under management.“It was another record year for hedge fund when it came to attracting new assets in spite of the slower pace in the fourth quarter,” Kenneth Heinz, HFR president, said. “The trend in strategy allocations suggests investors are not chasing the best performers, and are anticipating continued opportunities in arbitrage and event-driven.”
Why does any of this matter? 80% of the stories you read about in the paper talk about who hedge funds are collapsing, committing fraud or losing money hand over fist. The reality is that this thriving industry brought in over 11% average returns in 2007 and it is growing by leaps and bounds above most of those same media companies predicting their demise. The hedge fund industry has a PR problem with only 3-4 public relations consultants in the industry and well over 12,000 hedge funds in existence who largely are not allowed to do any mass marketing.
Special thanks to Fintag for finding this article and for his comment in response to this large inflow of assets, "Would you expect it to be the other way round? Of course not. We are the kings of the jungle."
Read more articles like this within the Hedge Fund Performance Category of this hedge fund blog.
- Richard
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