Elite hedge fund titans are having a tough time maintaining star status in the investing world.
The hedge fund business is growing at a slower pace with fewer, larger players in the market, according to a Barclays report on Monday. Assets under management are hitting an all-time high but fewer hedge funds are being launched, an indication of the industry’s maturation.
Hedge funds are seeing fewer funds flowing in and growth is now being driven primarily by market share, said the report.
–– Net inflows now represent 2 – 3% of the industry assets under management vs. 11% pre-2008.
–– Managers with more than $5 billion in assets under management control two-thirds of all industry assets (up from 56% in 2008).
–– Turnover among the Top-20 managers has historically been very high, pointing to difficulty in staying at the top.
–– The Top-20 share of industry assets under management has declined since 2008.
“Hedge fund managers looking to grow their assets under management today can no longer take inflows for granted,” said Harry Harrison, head of prime services, rates, securitized products and municipals trading at Barclays. “This challenging capital raising environment requires them to have a clear growth strategy involving the choice of a business model that supports their growth ambitions.”