The gap between the growing assets managed by large hedge fund managers and the dire declines of many hedge funds-of-funds firms widened into a chasm over the past year.
Aggregate assets of the 25 largest single and multistrategy hedge fund firms in Pensions & Investments' 2012 annual ranking grew 3.6% to $617.5 billion in the year ended June 30 from $596.1 billion a year earlier.
(View the complete special report, including data, at www.pionline.com/hedge.)
P&I's 2012 class of the largest hedge fund firms welcomed four new entrants, and a year-to-year comparison of the full universe showed much higher aggregate growth of 14.2% for the year ended June 30. The four firms are Davidson Kempner Capital Management LLC, with $19.5 billion under management; Lone Pine Capital LLC, $19.2 billion; Millennium Management LLC, $15.7 billion; and Viking Global Investors LP, $15.6 billion. Of these, Davidson Kempner and Lone Pine are new to P&I's full hedge fund universe.
By contrast, assets of the 25 largest hedge funds-of-funds managers, including three firms new to the ranking, in aggregate decreased 7% to $320.9 billion in the 12 months ended June 30 from $345.1 billion a year earlier.
A year-to-year comparison of the new universe of funds-of-funds firms showed a 6.6% decline in assets as of June 30, according to analysis of P&I data. Hedge funds-of-funds managers new to the top 25 are Aetos Alternatives Management LLC, with $8.7 billion; EnTrust Capital Inc., $7.5 billion; and Towers Watson Ltd., $7.3 billion. Of these, Towers Watson joined P&I's full hedge funds-of-funds universe for the first time in 2012.
Analysis of the data provide a telling glimpse into the drastically changed fortunes of many hedge funds-of-funds companies since the financial crisis of 2008.
In aggregate, worldwide assets managed by all hedge funds-of-funds managers declined 42% to $405.7 billion as of June 30 from the all-time high in rankings of $699.9 billion as of June 30, 2008.
On the other hand, assets of many hedge fund managers, both individually and in aggregate, rebounded far better after the 2008-2009 crash. P&I's 2012 survey deliberately targeted hedge funds that have attracted significant inflows from institutional investors over the past 12 to 18 months (P&I, Jan. 9).