Institutional investors' hedge fund activity rose nearly 17% in 2013, reaching a net total of $10.7 billion.
That activity covers searches for, and hirings of, hedge funds and fund-of-funds managers. A small amount (less than 10%) is attributed to manager terminations.
Net hedge fund activity totaled $9.1 billion for the year ended Dec. 31, 2012, which was a significant drop of 22.9% from the $11.8 billion of net activity in the year ended Dec. 31, 2011.
Pensions & Investments analyzed hedge fund investment, search and termination data from the P&IQ database in the three-year period ended Dec. 31, 2013.
A quick peek at the investment pace in the first quarter of 2014 looks promising, with net hedge fund activity of $3.8 billion, according to P&I's dive into its database.
If the pace continues over the next three quarters — and sources said there's no reason to expect a slowdown — net hedge fund assets could top $15 billion by year-end, the best annual growth in four years.
“There's been a lot of upsizing over the last 12 to 18 months,” with more on the way this year, said Stephen L. Nesbitt, CEO of alternatives consultant Cliffwater LLC, Marina del Rey, Calif.