29 fascinating statistics about hedge funds

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With hedge funds gathering plenty of attention in financial news the past couple of years, looking at 2018’s dismal number of closures and their slight revitalisation in 2019, we’ve decided to compile a short list of statistics to see how the state of the industry this year compares to the last worldwide.
Crypto hedge funds are on the up-and-up with increased regulatory support for the digital asset class, and there are certainly similarities between the jurisdictions of crypto and traditional funds. However, there are differences between the highest earners in the US and the UK and, looking into the role of women within the industry, there’s certainly a lot of room for change to bring more women to the C-suite in this sector.

Basic facts

1. [bctt tweet=”As of 2019, the number of hedge funds that have been launched worldwide is 735. – Statista” username=”kurtosys”]
2. [bctt tweet=”Hedge funds manage around 1.1% of the $90 trillion in global financial assets currently under management. – Reuters” username=”kurtosys”]
3. [bctt tweet=”The US hedge fund industry recorded an overall loss on 5.7% in 2018, making it the worst performing year since 2011 with $15 billion leaving the industry in November. – Open Gamma” username=”kurtosys”]
4. [bctt tweet=”The hedge fund industry achieved its best aggregate returns since the beginning of 2012 in the first quarter of 2019, where the year to date (YTD) average gains were +5.40%. – eVestment” username=”kurtosys”]
5. [bctt tweet=”Within the US hedge fund industry, 8,900 businesses are associated with them, which offering over 36,000 direct employment opportunities. – IBIS World” username=”kurtosys”]
6. [bctt tweet=”22% of investors avoid hedge funds within their portfolios due to the high fees charged. – The Balance” username=”kurtosys”]
7. [bctt tweet=”More than 51,000 institutional investors are allocated to hedge funds, but these investors must have had an annual income over $200,0000 for the past two years. – Visual Capitalist” username=”kurtosys”]
8. [bctt tweet=”The Renaissance Nova fund (a quant fund) has sometimes accounted for almost 14% of the NASDAQ’s trading volume, despite being staffed by only two traders. – Renaissance Technologies” username=”kurtosys”]
9. [bctt tweet=”59% of hedge fund firms pass regulatory compliance for their fund through their flagship product, whereas 14% pass on research costs, 28% on research-related travel and 27% on outsourcing their back office shadowing. – EY” username=”kurtosys”]

Distribution of funds and people

10. [bctt tweet=”Crypto hedge funds tend to be domiciled in the same jurisdictions as their traditional counterparts. The top three for these fund entities are the Cayman Islands (55%), the United States (17%) and the British Virgin Islands (13%). – PwC” username=”kurtosys”]
11. [bctt tweet=”The United Kingdom is home to more hedge fund managers than anywhere else in the world according to an employment data survey of 5,500 managers and over 700 firms. The average head count for the UK is 29, and the US has 20. – Prequin
12. [bctt tweet=”Australia, Brazil, Canada and France have 15 whilst Hong Kong and Singapore came in lowest, averaging just 7 workers per office. – Preqin” username=”kurtosys”]
13. [bctt tweet=”In the UK, as of May 2019, the top 20 hedge fund managers were collectively worth £18 billion, an increase of 13.6% for the year. – Financial News” username=”kurtosys”]
14. [bctt tweet=”Topping the pile of UK hedge fund manager earnings is Michael Platt, co-founder of BlueCrest Capital Management and worth an estimated £3.7 billion. – Financial News” username=”kurtosys”]
15. [bctt tweet=”In the US, known hedge fund personality Ray Dalio has returned to the top of the pile of the Rich List since 2011 ($2 billion). – Institutional Investor” username=”kurtosys”]
16. [bctt tweet=”Dalio supersedes James (Jim) Simons, whose Renaissance Institutional Diversified Alpha Fund rose 3.23% in 2018. – Institutional Investor” username=”kurtosys”]
17. [bctt tweet=”At only 44 years of age, Chase Coleman III is the youngest on the US Rich List, co-founder of Tiger Global Management which invests in tech and manages around $30 billion in AUM. – Bloomberg” username=”kurtosys”]
18. [bctt tweet=”Disappointingly, less than one in five hedge fund professionals are women, and this number drops to only 11% in senior ranks. – Prequin” username=”kurtosys”]
19. [bctt tweet=”There’s been slow progress in closing the gender gap. The number of workers has only risen to 19.3% in early 2019, only up a tiny amount from the 18.6% in November 2017. – Prequin” username=”kurtosys”]
20. [bctt tweet=”Looking at positions in investor relations in hedge funds, women appear to hold an almost equal number to men (48%). However, 62% of junior staff jobs were held by woman and only 32% in senior staff roles. – Prequin” username=”kurtosys”]
21. [bctt tweet=”In the C-Suite, less than one in five are defined as Chief Operating Officer, and only 4% hold Chief Investment Officer as their title. – Prequin” username=”kurtosys”]

Crypto hedge funds & ETFs

22. [bctt tweet=”There are an estimated 150 active crypto hedge funds globally, managing $1 billion assets under management collectively. – PwC” username=”kurtosys”]
23. [bctt tweet=”The average team size within crypto hedge funds is 7 or 9 people. – PwC” username=”kurtosys”]
24. [bctt tweet=”52% of these funds use an independent custodian and only a quarter have independent directors on their boards. Most traditional funds have independent directors due to corporate governance issues – PwC” username=””]
25. [bctt tweet=”2018 proved to be a tough year for crypto with Bitcoin down a remarkable 72%, with the median crypto fund returning a poor -46%, proving its volatility. – PwC” username=”kurtosys”]
26. [bctt tweet=”However, considering most surveyed use Bitcoin as a benchmark, the beta coefficient was 0.82 to Bitcoin; the median fund’s return was linked to the asset’s price and these managers did manage to outperform their benchmark. – PwC” username=”kurtosys”]
27. [bctt tweet=”Only 7% of crypto hedge funds use third party research and choose to conduct their own. In its early stages, it may be due to limited numbers of crypto research providers at this moment in time. – PwC” username=”kurtosys”]
28. [bctt tweet=”The largest Hedge Funds ETF is the IQ Merger Arbitrage ETF MNA which holds $956.99 million in assets. – ETF.com” username=”kurtosys”]
29. [bctt tweet=”The best performing Hedge Funds ETF in 2018 was the BTAL at 14.13%, and the most recently launched ETF in this space was the iM DBi Managed Futures Strategy ETF DBMF in 08/05/19. – ETF.com” username=”kurtosys”]
Given the rise in this new generation of hedge funds and the growing need for female representation in the industry, it’ll be interesting to see how these facts and figures change as we head into 2020 and beyond.
Have you found out any more exciting facts about the hedge fund industry? Let us know!

Elliot Burr

Elliot Burr

Fervently chatting about the future of funds and fintech.