Assets managed by hedge funds will double to $2 trillion by 2009 and swell to $4 trillion by 2013 and $6 trillion by 2015, George P. Van, chairman of Van Hedge Fund Advisors International, predicted in a just-released report, Hedge Fund Demand and Capacity 2005-2015.
Mr. Van warned that the hedge fund industry will need "at least another year to adjust to new demand levels," involving exploitation of "new strategies and markets," but after that, should comfortably absorb "huge growth in coming years."
He acknowledged in the report that some observers may think his growth predictions are aggressive, but he drew a parallel with the explosive growth of the mutual fund industry, which expanded four-fold from $1 trillion in 1990 over the following seven years. He also noted that the mutual fund industry took 66 years to reach the $1 trillion mark, while it took the hedge fund industry 55 years to hit the milestone. Mr. Van also reminded readers that his 2004 forecast that hedge fund assets would reach $1 trillion in 2005 was met with skepticism.
