Institutional flows bolster hedge fund industry

Rising allocations from institutional investors helped increase hedge fund assets under administration by more than 6% in the second half of 2013.

Rising allocations from institutional investors helped increase hedge fund assets under administration by more than 6% in the second half of 2013. 

At the end of last year, there was $6.4 trillion (€4.6 trillion) under administration by firms participating in a survey by research firm eVestment. 

The growth was less fast than in the first half of the year, when hedge fund assets under administration leapt 23%, but is still far ahead of the average industry growth rate since 2009 which works out at less than 4% a year. 

State Street Alternative Investment Solutions is the largest hedge fund administrator by assets, according to the survey. The State Street subsidiary reported $708 billion of hedge fund assets under administration at the end of 2013, ahead of Citco Fund Services, which reported $576 billion, and BNY Mellon Alternative Investment Services, with $465 billion. 

Among the largest players, Citi reported some of the fastest growth. Its reported hedge fund assets rose by a fifth in the second half of 2013 to put the firm in fifth place with $298 billion. 

The research follows data from the same company that says that, in February, hedge funds had their best monthly performance since January 2012 – suggesting administrators will soon be buoyed by more asset growth.

©2014 funds europe

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