Hedge fund growth begins to slow in 2010

GROWTH in hedge fund assets slowed during the first half of 2010, climbing two per cent to reach $1.87 trillion (£1.18 trillion).

This was a marked slowdown from the second half of 2009, when the industry bounced back 10 per cent following the financial meltdown, according to data by HedgeFund Intelligence

The incremental growth means the industry is still well below its historic high of $2.65 trillion, set during 2007 before the global financial crisis took hold. As in previous years, the lion’s share of global assets are managed in the United States, with the 217 members of the Absolute Return Billion Dollar Club alone accounting for combined assets of over $1.2 trillion.

New York remains the biggest single centre of the industry, followed by London which is still in second place. Assets in standard European hedge funds did not rise at all in the first half.

The rising centres include places in Asia such as Hong Kong, where the number of firms in the Billion Dollar Club jumped from six to 10 in the first half of the year; and in Latin America, where there are now five firms with $1bn or more in either Sao Paulo or Rio de Janeiro.