WEST PALM BEACH, FL (www.hedgeco.net) – The global hedge fund industry has witnessed significant asset growth over the past four years, new data inflows into hedge fund managed portfolios show thatthe industry now manages well over $1 trillion. Many experts believe the industry may undergo a consolidation period in order to absorb the impact of such growth. In 2004 alone, hedge funds addednearly $80 billion to its coffers.
According to the New York based industry tracker, Hennessee Group, more than 350 hedge funds closed down last year. Hennessee Group also disclosed that the hedge fund industry lost 5.3 percent of its managers in 2004.
Regardless of such trend, the average hedge fund returned about 9 percent in 2004, a healthy performance nonetheless. Such return however trails the average return of nearly 12 percent posted by stock mutual funds. Some market watchers believe the industry will be facing consolidation in the years to come. These views point to the declining trading opportunities and market volatility in 2004.
Others believe that the global hedge fund industry is set to explode in terms of new interest and assets coming from the institutional investor markets including pension funds, endowments and insurance establishments. The growing interest from the institutional investors will continue to propel the industry forward in the years to come such viewpoints believe. Today there are over 8.000 global hedge funds overseeing well over $1 trillion in total investor assets.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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