Assets managed in hedge funds total about $850 billion, new data from managed futures specialist manager Winton Group showed.
That's in sharp contrast to the $3.6 trillion sum the U.S. Securities and Exchange Commission reported as managed in hedge funds as of March 31.
The discrepancy, according to Winton Group researchers, is definitional.
"The extent to which a given definition of a hedge fund includes various characteristics can affect the size of what is commonly perceived to be the industry, with the assets it manages ranging from approximately $848 billion plus or minus $27 billion to $2,002 billion plus or minus $56 billion," Winton Group's report showed.
Winton gathered data from a variety of sources, including the hedge fund databases of Hedge Fund Research and Preqin. The firm's analysis found that aggregate assets managed by funds that charge a management fee of at least 2% and a minimum performance fee of 20%, use leverage and employ shorting in lightly regulated, traditional hedge fund vehicles manage about $848 billion.
Under a looser definition, funds that charge 2-and-20 but don't use leverage or shorting manage a total of around $914 billion plus or minus $29 billion.
If the universe of funds is further expanded to include those that charge at least 1% for management and 10% for performance and don't lever or short assets, industrywide AUM rises to about $2 trillion.
"Our research shows that the idea that hedge funds operate in sharp distinction to the larger active management industry has never been more dubious," said Jonathan Levy, Winton Group head of product research, said in a news release accompanying the data analysis.
"A hedge fund industry managed $3 trillion, one that is lightly regulated and characterized by a 2-and-20 fee model, low transparency, illiquidity and extensive use of leverage and shorting — does not exist," Mr. Levy added.