Hedge funds dominate private-fund assets, SEC report finds

Nearly half of all private fund assets in the U.S. came from large hedge funds, according to the first report on private fund managers ordered by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Delivered to Congress by the Securities and Exchange Commission's Division of Investment Management, the report found that of the $7.28 trillion managed by private funds, $3.28 trillion came from 1,169 hedge funds with $500 million or more.

Of the 823 hedge funds with $500 million or more that reported specific strategies, 569 reported a single primary strategy, while 252 reported multiple strategies.

Private equity funds with at least $150 million had $1.6 trillion combined.

The Dodd-Frank Act required private funds to report information on assets, leverage and trading practices as part of an effort to better assess systemic risk. Under the “Form PF” rules for private funds, hedge fund firms managing at least $1.5 billion and liquidity or money market fund managers with at least $1 billion in assets under management must report quarterly, while private equity managers with more than $2 billion under management have to file annually. All other managers with assets under management of more than $150 million must file annually.

According to the report, the Form PF information will also support the commission's examinations, investigations and investor protection efforts.