New York, NY, USA
September
3,
2003
The Fund of
Hedge Funds Industry
Report Published by Celent
Celent
predicts that the fund of hedge fund industry will sustain growth of at
least 17% for the next 3 years as institutions and individuals take
greater interest in hedge fund portfolio management.
The
fund of hedge funds industry has grown dramatically in recent years, now
controlling US$81billion in assets. This growth has been driven by the
sheer number and diversity of individual hedge funds, coupled with the
complication of hedge fund portfolio management. In a new report entitled,
"The
Fund of Hedge Funds Industry,"
Celent analyzes the business model and growth opportunities for the
fund of hedge funds industry.
The
fund of hedge funds industry is riding the crest of two major market
trends. The first is the interest of institutional investors in hedge fund
investments. The total quantity of institutional assets in hedge funds is
rising, as are the number of institutions making investments. The second
is the general public’s tremendous interest in hedge fund investments.
This interest has led traditional asset managers to offer hedge fund
products, and hedge fund managers to partner with traditional financial
distribution channels to access individual assets.
In
an increasing number of countries, financial regulators are relaxing their
restrictions on individuals investing in hedge funds. Funds of hedge funds
are receiving special attention, as these firms are seen as the
alternative asset industry’s equivalent of mutual funds. In Ireland,
Hong Kong and Singapore, specific regulations now exist for fund of hedge
fund managers and investors. In the United States, some funds have chosen
to register with the SEC, essentially making the argument that, for all
intents and purposes, their activities are no different from a traditional
mutual fund.
"A
greater public understanding of hedge fund products will drive the growth
of the fund of hedge fund industry, though capacity constraints will hold
it back,"
comments Octavio Marenzi,
managing director of Celent and co-author of the report. “Investor demand will outweigh downsides, but smart hedge funds
should look to the mutual fund industry for strategies on technology and
operations.”
The
24-page report contains 4 figures and 8 tables.
A Table
of Contents is available online.
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