Updated with correction
IIn a sharp reversal of fortune, the majority of hedge funds and hedge funds of funds experienced asset declines ranging from slight to extreme in the year ended June 30.
The turnabout was dramatic: 59% of managers reported a decline in assets they managed worldwide in hedge funds compared with the year-earlier period, when 70% reported asset growth.
In response to Pensions & Investments' seventh annual hedge fund survey, only one quarter of the 118 hedge fund companies in the survey reported positive or flat hedge fund asset growth as of the end of June. The remaining 16%, or 19 firms, were new respondents.
Hedge funds-of-funds managers suffered similarly in the period: 61% of the 44 firms surveyed reported lower assets managed worldwide in hedge funds of funds and customized portfolios; 21% reported an increase; and the remaining 18% were new or merged with another firm during the past year.
By comparison, 55% of hedge funds-of-funds managers surveyed said assets rose as of June 30, 2015.
Despite the wide dispersion of individual firms' asset changes — which ranged from 65.6% to -80.1% (excluding year-to-year changes from recategorized assets) — aggregate assets managed in single and multistrategy hedge funds by the institutionally oriented firms surveyed by P&I rose 5.3% to $1.203trillion in the year ended June 30. Assets of the 25 largest hedge fund managers in the universe totaled $724 billion, 60% of the total.
Aggregate assets managed worldwide in hedge funds-of-funds portfolios, on the other hand, declined 5.2% to $418 billion in the yearlong period ended June 30. The 25 largest hedge funds-of-funds firms managed a total of $379 billion, 91% of the total. Changes in assets under management of hedge funds-of-funds managers (excluding year-to-year changes from recategorized assets and mergers) ranged from 34.7% to -35.4%.