(September 23, 2013) — US-based hedge funds have outperformed the global benchmark so far this year, seeing an increase in assets of over $150 billion, according to Preqin.
European funds, on the other hand, experienced a rise of only $33 billion in assets in 2013.
The research found that US hedge funds recovered faster and grew stronger than other regions, managing over $508 billion in assets, or 65% of capital handled by hedge funds globally.
Examining data from more than 2,700 US institutional investors and more than 3,200 fund managers, Preqin concluded that US hedge funds produced a net return of 13.54%, much higher than the global average return of 11.09%.
Amy Bensted, head of hedge fund products for Preqin, said the US has significantly grown as the center of the hedge fund industry, thanks to American institutional investors, despite the funds struggling across the board.
“US-based institutional investors represent a vital source of capital for hedge fund managers,” she said. “These investors recognize the value that hedge funds can add to their portfolio, and have begun to allocate significant sums to hedge funds to complement their traditional equity and fixed income portfolios.”
The data supported Bensted’s theory. Some 73%, or $1.74 trillion, of total hedge fund industry assets under management was attributable to US investors.
Also, the study found that US hedge funds had fared better than global funds on a three and five-year annualized basis, contributing to the consistent and growing presence in the industry.
Preqin stated that 95% of all US hedge funds were based in 10 states: New York, California, Connecticut, Massachusetts, Illinois, Texas, New jersey, Minnesota, Pennsylvania, and Florida.
With $838 billion in assets under management, or 40% of total US funds, New York was clearly the largest “leading center” for hedge funds, research found. New York-based hedge funds produced a 7.56% net return in 2013 so far.
The full report can be found here.
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