The hedge fund industry grew 5% in 2002, to $592 billion, despite a loss on investments of 3.43% net of fees, according to Hennessee Groups ninth annual survey of hedge fund managers. The study showed managers decreased their market exposure to historic lows, holding large amounts of cash throughout the year in an attempt to position their portfolios defensively. In addition, 20% of managers reported they allow investors to see their entire portfolio, up from 17% that did so in 2001, according to the survey.
The median hedge fund had $124 million last year, and the average hedge fund manager said he or she would like to manage $693 million by the end of this year, down from the $893 million average reported in the 2001 survey. Hennessee Group surveyed 793 hedge fund management companies with more than $137 billion in assets.