The 505 largest hedge fund managers in the world, each with over $1bn (€734m) under management, control 90% of the industry’s assets, research by Preqin showed yesterday.
They collectively manage $2.39 trillion of the industry’s $2.66tn in assets but account for just 11% of active firms, the industry tracker said in a statement.
“The increase in hedge fund assets is being driven by allocations from the largest investors in hedge funds, those which currently allocate more than $1bn to the asset class,” said Amy Bensted, head of hedge funds products.
“With these investors allocating approximately $650bn to hedge funds, an 18% increase from this time last year, it will be important for hedge fund managers to attract inflows from these prominent institutional investors,” Ms Bensted added.
Public pension funds make up 25% of the money invested by those institutions, with sovereign wealth funds at 16%, up from 7% a year earlier, and private sector pension funds making up 15%.
More than half of that capital is from institutions in north America, although this is down from 67% in May 2013, as institutions in other areas increase allocations, Preqin said.
Investors into the $1bn plus club require, on average, a fund track record of 2.9 years and a minimum assets under management of $700m before they will invest, Preqin said.