Hedge funds with an institutional orientation produced exceptionally strong net asset growth of 18.3% in the year ended June 30.
Aggregate assets managed worldwide in single and multistrategy hedge funds by the 113 firms in Pensions & Investments' universe totaled $1.336 trillion as of June 30. By comparison, net aggregate asset growth was 3.1% as of the same date a year earlier and 5.3% in the year ended June 30, 2016.
For the second year in a row, more hedge fund managers and hedge funds-of-funds firms reported asset growth rather than declines or flat levels in response to P&I's ninth-annual survey.
Nearly half — 48% — of the managers reported growth in assets managed worldwide in hedge funds in the 12 months ended June 30. Asset declines were experienced by 26% of respondents, while 2% of firms said AUM was flat and 24% were new to P&I's survey.
In the prior year's survey, 46% of managers said AUM had grown, 4% were flat, 29% were down and 21% were new to the survey.
P&I annually surveys institutionally oriented firms to collect data about worldwide asset managed in hedge funds and funds of funds. The universe of hedge funds that responds to the survey changes each year, which might affect year-to-year comparisons.
Data for hedge funds that do not respond to P&I's survey are collected from industry sources or from the firm's ADV Investment Adviser Disclosure forms filed with the U.S. Securities and Exchange Commission.
The span of changes among individual hedge fund managers was broad.
The largest gain from pure asset growth in P&I's hedge fund manager universe — 76.1% — came from 73rd-ranked LaFrancaise Investment Solutions, which now manages $3.7 billion.
Growth for the Paris-based firm in the year ended June 30 was driven by flows into its actively managed multistrategy hedge fund, which relies on a risk-premium-based strategy, said Giselle Comissiong, marketing and communication director, in an email. The fund's portfolio managers invest both long and short, and employ derivatives and arbitrage methods to produce absolute returns.
London-based Brevan Howard Asset Management LLP suffered the largest decline in the year ended June 30, with AUM falling 34.8% to $7.74 billion. The firm's assets have been declining steadily from a peak of $39.7 billion as of June 30, 2013, according to the firm's responses to P&I's surveys.
When it comes to hedge funds of funds, the managers that completed P&I's survey also experienced a reasonably strong AUM growth in year ended June 30 with aggregate assets of $435.2 billion managed worldwide, up 6.2% from the year before.
As of June 30, 53% of hedge funds of funds reported net asset growth in the prior 12 months compared with 61% as of the same date in 2017 and 21% in 2016. Asset declines were suffered by 37% of funds of funds in the year ended June 30 vs. 29% the prior year and 61% in the year ended June 30, 2016. New managers accounted for the remainder in each of the three years.
Lyxor Asset Management SAS, Paris, experienced the highest AUM growth for the second year in a row — 20.9% — to $15.4 billion. The firm's AUM grew 41.1% in the year ended June 30, 2017.
Assets of PAAMCO Prisma Holdings LLC, Irvine, Calif., declined 23.2% in the year ended June 30 to $13.7 billion, the largest drop in P&I's hedge funds-of-funds universe.