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Hedge Funds – Value Under the Spotlight

Preqin has launched its 2015 Global Alternatives Reports, revealing significant growth in assets held by private equity, hedge fund, private debt, real estate and infrastructure fund managers. Total industry assets now stand at USD6.91tn*, up from USD6.22tn as of this point last year.

A challenging performance environment resulted in the hedge fund benchmark failing to make gains of more than 4%. However, despite this, the asset class accounted for over half of the asset growth across alternatives, as investors continued to deploy capital in funds that offered attractive opportunities.

The 2015 Global Hedge Fund Report provides a comprehensive review of the industry along with contributions from respected industry figures and the outlook for the coming year. Some of the key findings in the report are as follows:

• Hedge funds posted returns of 3.78% over 2014, the lowest average returns seen by the asset class since 2011. This compares to average returns of 12.25% seen in 2013.

• Despite this, the hedge fund industry saw the highest growth in assets over the last year compared to other alternative assets, from $2.66tn at the end of 2013 to just under USD3.02tn.

• The value of investing in the asset class will be under scrutiny by investors throughout 2015, with investors naming performance and fees as the key issues facing the industry over the coming year.

• Sub-par performance of hedge funds and the recent news of CalPERS cutting its exposure to the asset class does not appear to have deterred investors, whose commitments in 2014 saw managers witness the largest growth in their asset base of any asset class this year. 

To find out more about Preqin’s 2015 Global Alternatives Reports, including full contents and sample pages, visit our website.

*The USD6.91tn of industry assets is made up of USD3.02tn in hedge fund assets, USD3.79tn in private equity assets (which includes USD742bn in real estate assets, USD296bn in infrastructure assets and USD387bn in non-direct lending private debt assets), and USD97bn in direct lending assets.

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