Assets managed in hedge funds of funds rose 28.5% in the first quarter, much faster than the hedge fund industry as a whole, according to new data from alternatives researcher The Barclay Group.
Fund-of-funds assets totaled $636.3 billion as of March 31. By contrast, the assets in the entire hedge fund industry totaled $1.036 trillion, up just 2.3% over the previous quarter. Sol Waksman, Barclay Group president, said the most interesting development in the first quarter was that "hedge funds of funds have gotten bigger in the face of a general slowdown in growth for single-manager hedge funds. Funds of funds are taking over."
Hedge fund assets grew about 150% to more than $1 trillion in 2004, compared with about $400 billion a year earlier, according to Barclay Group data. Hedge fund-of-funds assets grew at much slower pace over the same period, up 66.7% to $500 billion as of Dec. 31, 2004, from $300 billion a year earlier.
Of the 14 hedge fund strategies tracked by The Barclay Group, asset growth was essentially flat for four of them; down for two; and up modestly for eight. Assets of convertible arbitrage strategies were down the most - 21% - in the first quarter. Assets invested in event-driven strategies rose the most - 11.1% - followed by macro strategies, at 9.2%, according to The Barclay Group data.
The Barclay Group's data comes from its database of more than 4,300 hedge funds and managed futures strategies.