Preqin Special Report: Hedge Funds In The Us
PREQIN SPECIAL REPORT:HEDGE FUNDS IN THE USJULY 2018
PREQIN SPECIAL REPORT: HEDGE FUNDS IN THE USFOREWORDThe US is home to more hedge fund managers, investors and capital than any other region in the world: 72% of total hedge fundindustry assets are overseen by managers based in the US. When we published our last report on ‘Hedge Funds in the US’ in 2016,the industry was facing a challenging fundraising and performance environment. However, over the past 18 months the environmentfor hedge funds has significantly improved. In 2017, hedge funds in the US achieved a “perfect 12”: 12 consecutive months of positiveperformance. Preqin’s recent survey of over 360 hedge fund managers revealed that 64% of North America-based managers recordedgrowth in assets under management (AUM) over 2017, with the total size of the US hedge fund industry amounting to 2.63tn as atNovember 2017.All 50 US states contain at least one institutional investor actively seeking to invest in hedge funds, and North Dakota and West Virginia arethe only states without any hedge fund managers. Using the profiles of over 3,400 institutional investors and 3,300 hedge fund managerson Preqin’s online platform, this report examines the current state of the hedge fund industry in the US, and takes a closer look at the 10leading states for hedge fund activity. There are vastly different hedge fund industries from state to state within the US: from New York,home to over half of those managers with 1bn or more in AUM; to Connecticut, which has the largest hedge fund manager in the world;and Texas, home of the largest single allocator to hedge funds in the US. Preqin Special Report: Hedge Funds in the US gives a detailedanalysis of this centre of the worldwide hedge fund industry.We hope you find this report useful, and welcome any feedback you may have. For more information about Preqin and our services,please visit www.preqin.com or contact info@preqin.com.p3Hedge Funds in the USp5New noisp10Texasp11New Jerseyp12Floridap13Pennsylvaniap14Virginiap15Other StatesAll rights reserved. The entire contents of Preqin Special Report: Hedge Funds in the US, July 2018 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any electronic means, or stored in any electronicor other data storage medium, or printed or published in any document, report or publication, without the express prior written approval of Preqin Ltd. The information presented in Preqin Special Report: Hedge Funds in the US, July 2018 is for information purposesonly and does not constitute and should not be construed as a solicitation or other offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as advice of any nature whatsoever. If the reader seeks advice rather thaninformation then he should seek an independent financial advisor and hereby agrees that he will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever nature the reader makes or refrains from making following its use of Preqin Special Report:Hedge Funds in the US, July 2018. While reasonable efforts have been made to obtain information from sources that are believed to be accurate, and to confirm the accuracy of such information wherever possible, Preqin Ltd. does not make any representation or warrantythat the information or opinions contained in Preqin Special Report: Hedge Funds in the US, July 2018 are accurate, reliable, up-to-date or complete. Although every reasonable effort has been made to ensure the accuracy of this publication Preqin Ltd. does not acceptany responsibility for any errors or omissions within Preqin Special Report: Hedge Funds in the US, July 2018 or for any expense or other loss alleged to have arisen in any way with a reader’s use of this publication.2 Preqin Ltd. 2018 / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/HFUS18HEDGE FUNDS IN THE USFig. 1: Active US-Based Hedge Fund Managers and Institutional Investors by GA3ALTAll 50 US states are home to at least oneinstitutional investor actively investingin hedge funds, and there are only twostates that have no hedge fund managersoperating within them. This report willexamine the states where the largestlevel of hedge fund activity takes placeacross the US, based on an assessmentof a combination of factors for each state,including the number of fund managersand investors, capital invested in hedgefunds and total AUM. New York accountsfor just under half of all US hedge fundindustry assets (page 5); 339559140163103No. of Institutional InvestorsNo. of Hedge Fund ManagersFig. 2: Capital Invested in Hedge Funds by US-Based Institutional Investors by Type(Excluding Funds of Hedge 001,0008006004002000Dec-13Dec-14Public Pension FundEndowment PlanFamily OfficeAsset ManagerSovereign Wealth FundSize of US HF IndustryDec-15Dec-16Size of US Hedge FundIndustry ( tn)he US remains a key driver of thehedge fund industry across the globe,accounting for 72% of the approximate 3.6tn in global assets as at 31 May 2018.Despite hedge fund activity in otherregions globally expanding alongside thatof the US, the country accounts for 3,405of the 5,523 institutional investors active inhedge funds and 3,319 of the 5,383 activehedge fund managers tracked by 91306732104WV151Capital Invested in HedgeFunds ( 31WI18VT371610MN636SD4WYNV16NH37Dec-17Private Sector Pension FundFoundationInsurance CompanyWealth ManagerOtherSource: Preqinis home to the two largest hedge fundmanagers in the world (page 6).make-up of investors active in hedge fundsand the largest players in the industry.For each of the top states, we look at thesize of the local hedge fund industry, the3
PREQIN SPECIAL REPORT: HEDGE FUNDS IN THE USUS-BASED HEDGE FUND INVESTORSPension funds are, by some distance, thelargest aggregate allocator to hedge funds,contributing almost half of all institutionalcapital invested in the asset class by USbased institutional investors (Fig. 2).Over half of US-based funds of hedgefunds are based in New York (Fig. 3),with the aggregate AUM of fund of fundsmanagers headquartered in the statetotalling 310bn. Blackstone AlternativeAsset Management is the largest fundof hedge funds manager in the US and,indeed, the world, currently managing 75bn (as at May 2018).6% respectively. Single-manager hedgefunds account for a significant majority(76%) of US-based hedge funds, withfunds of hedge funds, managed futures/CTAs and liquid alternative structuresrepresenting 13%, 6% and 3% respectively(Fig. 4).US-BASED HEDGE FUND MANAGERSOver one-third (36%) of all US-based fundmanagers are based in New York, whileCalifornia and Texas are home to 15% andFig. 3: Assets under Management of US-Based Funds of HedgeFunds by Manager LocationFig. 4: US-Based Hedge Funds by StructureNew York1%1% 1%4%2%2%4%Connecticut6%IllinoisCommingled FundFund of Hedge FundsCalifornia7%3% ternative MutualFundWashington D.C.PennsylvaniaUCITSTennessee13%76%OtherNorth CarolinaOther StatesSource: PreqinSource: PreqinFig. 5: Most Active US States in the Hedge Fund IndustryInvestorsFund ManagersNo. of ActiveInstitutionalInvestorsAverage CurrentAllocation to HF(%)No. of ActiveFoHF ManagersFoHF ManagerAUM ( bn)No. of HedgeFund ManagersIndustry Size( bn)New 8523183New 0116StateNorth n3114.200154Tennessee5024.867324Source: Preqin4 Preqin Ltd. 2018 / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/HFUS18NEW YORKNew York dominates the US hedge fund industry, representing34% of global industry AUM and 47% of all US-based hedgefunds. New York City is home to 92% of all hedge fund managersbased in the state.1,284Investors based in New York currently allocate an average of21.4% of their total assets to hedge funds. This is the largestaverage allocation among the top 10 states and the fourth highestamong all 50 states. 1.24tnIN NUMBERSNumber of active New York-based hedgefund managers.Size of the New York hedge fund industry.The combination of the large levels of AUM managed within thestate, the large number of investors and the sheer size of theirallocations highlights New York’s importance as a centre for thehedge fund industry.591Number of New York-based institutionalinvestors active in hedge funds.253Number of New York-based hedge fundmanagers with over 1bn in AUM.Fig. 6: New York-Based Hedge Funds by Top-Level Strategy6% 306mnEquity Strategies1%4%Event Driven Strategies7%Average current allocation to hedge fundsof a New York-based institutional investoractive in the asset class.Credit Strategies40%10%Multi-Strategy147.20%Relative Value StrategiesMacro Strategies14%12-month net return to May 2018 of NewYork-headquartered Navy Capital GreenFund, the best performing US-based fund.Managed Futures/CTANiche Strategies19%Alternative Risk PremiaSource: PreqinFig. 7: New York-Based Investors Active in Hedge Funds by TypeFund of Hedge FundsManagerFoundation1% 5%3%24%8%Fig. 8: Largest New York-Based Institutional Investors by CurrentAllocation to Hedge FundsInvestorCurrent Allocation to HF( mn)Citi Private Bank7,254AIG5,768New York Common Retirement Fund5,437Family OfficeSource: PreqinEndowment Plan11%Private Sector PensionFundWealth Manager13%21%14%Asset ManagerPublic Pension FundOtherSource: PreqinFig. 9: Largest New York-Based Hedge Fund Managers by Assetsunder ManagementManagerAssets underManagement ( mn)Renaissance Technologies58,043J.P. Morgan Asset Management51,223Two Sigma Investments35,400Source: Preqin5
PREQIN SPECIAL REPORT: HEDGE FUNDS IN THE USCONNECTICUTConnecticut is home to some of the largest hedge funds in theworld – including Westport-based Bridgewater Associates, thelargest hedge fund manager globally – so it is no surprise that theConstitution State houses the second highest level of hedge fundcapital after New York.IN NUMBERS211Number of active Connecticut-based hedgefund managers.Hedge fund managers based in Connecticut outnumberinstitutional investors investing in hedge funds by a 2:1 ratio. Thetwo largest hedge fund managers based in Connecticut hold 58%of the total AUM within the state. 390bnSize of the Connecticut hedge fund industry.Connecticut-based institutional investors currently allocate anaverage of 19.2% of their total AUM to hedge funds. While fundof hedge funds managers are the most numerous investor typein Connecticut, representing a quarter of the investor pool,foundations (16%) and public pension funds (15%) also accountfor sizeable portions of investors in the state (Fig. 11).105Number of Connecticut-based institutionalinvestors active in hedge funds.1stWestport-based Bridgewater Associates isthe largest hedge fund manager in the world.Fig. 10: Connecticut-Based Hedge Funds by Top-Level StrategyEquity Strategies6%3%1.47%Credit Strategies6%Average management fee charged byConnecticut-based hedge funds.Event Driven Strategies6%38%Multi-Strategy19.2%Managed Futures/CTA13%Average current allocation to hedge fundsamong Connecticut-based investors (as a %of total assets).Relative Value StrategiesMacro Strategies13%Niche Strategies14%Alternative Risk PremiaSource: PreqinFig. 11: Connecticut-Based Investors Active in Hedge Funds byTypeFund of Hedge FundsManagerFoundation4% 3%8%25%8%Public Pension FundCurrent Allocation to HF( mn)InvestorYale University Endowment6,015United Technologies Pension Fund3,483General Electric Pension Trust3,464Source: PreqinFamily OfficeEndowment Plan10%16%11%Private Sector PensionFundWealth ManagerInsurance Company15%Asset ManagerSource: Preqin6Fig. 12: Largest Connecticut-Based Institutional Investors byCurrent Allocation to Hedge FundsFig. 13: Largest Connecticut-Based Hedge Fund Managers byAssets under ManagementManagerAssets underManagement ( mn)Bridgewater Associates162,981AQR Capital Management119,000Viking Global Investors25,100Source: Preqin Preqin Ltd. 2018 / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/HFUS18CALIFORNIAWith 263bn in combined assets, California boasts the thirdlargest hedge fund industry in the US. Of the 537 hedgefund managers located in the Golden State, 173 of them arefound in San Francisco, the city with the highest density of fundmanagers in the state.IN NUMBERS537Number of active California-based hedgefund managers.Over half (62%) of all California-based investors currently operatewith less than 1bn in AUM, while the majority (82%) of fundmanagers based in the state also manage less than 1bn in assets. 263bnSize of the California hedge fund industry.California is home to the manager of the oldest active hedge fundin the US, Cypress Partners Master Fund L.P., which is managed byCypress Partners L.P. and was founded in September 1969.362Number of California-based institutionalinvestors active in hedge funds.18.91%Average performance fee charged byCalifornia-based hedge funds.Fig. 14: California-Based Hedge Funds by Top-Level StrategyEquity Strategies2%3%6% 23.8bnCredit Strategies7%AUM of Farallon Capital Management, thelargest California-based hedge fund manager(as at 31 May 2018).Event Driven StrategiesRelative Value Strategies8%51%Managed Futures/CTA16.7%Multi-Strategy11%Average current allocation to hedge fundsamong California-based institutionalinvestors active in the asset class.Macro StrategiesNiche Strategies12%Alternative Risk PremiaSource: PreqinFig. 15: California-Based Investors Active in Hedge Funds byType7%2%3%30%9%11%InvestorCurrent Allocation to HF( mn)FoundationRegents of the University of California6,369Wealth ManagerStanford Management Company5,498CTC myCFO5,000Endowment PlanSource: PreqinFund of Hedge FundsManagerPrivate Sector PensionFundFamily OfficeFig. 17: Largest California-Based Hedge Fund Managers byAssets under ManagementPublic Pension FundManager14%11%Fig. 16: Largest California-Based Institutional Investors byCurrent Allocation to Hedge FundsAsset Manager13%OtherSource: PreqinAssets underManagement ( mn)Farallon Capital Management23,800Symphony Asset Management19,443PIMCO18,515Source: Preqin7
PREQIN SPECIAL REPORT: HEDGE FUNDS IN THE USMASSACHUSETTSMassachusetts currently has 239 institutional investors activein hedge funds – the third highest number of any state in theUS. Public pension funds represent the greatest proportion (36%)of the Massachusetts investor universe (Fig. 18), a compositionseen in just two other states (Missouri and Nebraska).IN NUMBERS182Number of active Massachusetts-basedhedge fund managers.Of the nine Massachusetts-based fund managers with over 10bnin AUM, all are headquartered in Boston. The city is also home to68% of all fund managers based in Massachusetts. 192bnSize of the Massachusetts hedge fundindustry.The hedge fund industry in Massachusetts is the fourth largestin the US ( 192bn) and, on average, managers based in the stateoffer the lowest performance fees (17.4%) among the 10 featuredstates.239Number of Massachusetts-based institutionalinvestors active in hedge funds. 8.5bnAverage AUM of Massachusetts-basedinstitutional investors active in the assetclass.Fig. 18: Massachusetts-Based Hedge Funds by Top-LevelStrategy7%Equity Strategies1%3% 3.6mnCredit StrategiesAverage minimum investment set byMassachusetts-based hedge fund managers.Relative Value Strategies7%Macro Strategies8%6.53%Event Driven Strategies56%9%Three-year annualized net return ofMassachusetts-based hedge funds (as at May2018).Multi-StrategyManaged Futures/CTA10%Alternative Risk PremiaNiche StrategiesSource: PreqinFig. 19: Massachusetts-Based Investors Active in Hedge Fundsby Type5%1%3%5%36%8%10%16%Harvard Management Company7,964Endowment PlanMassachusetts Pension Reserves InvestmentManagement Board7,630FoundationSCS Financial - Private Client Group3,473Fund of Hedge FundsManagerWealth ManagerPrivate Sector PensionFundAsset ManagerOtherSource: Preqin8Current Allocation to HF( mn)InvestorPublic Pension FundFamily Office15%Fig. 20: Largest Massachusetts-Based Institutional Investors byCurrent Allocation to Hedge FundsSource: PreqinFig. 21: Largest Massachusetts-Based Hedge Fund Managers byAssets under ManagementManagerAssets underManagement ( mn)Adage Capital Management32,428Baupost Group31,100Wellington Management15,600Source: Preqin Preqin Ltd. 2018 / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/HFUS18ILLINOISThere are 103 managed futures/CTAs based in Illinois, makingup 14% of all vehicles of this kind in the US, second only toNew York which is home to 175 vehicles. This high concentrationof managed futures/CTAs could be attributed to the fact Illinoisis home to the world’s largest derivatives exchange, The ChicagoMercantile Exchange; Chicago is home to 8% of fund managersoverseeing CTAs, second only to New York (17%).IN NUMBERS190Number of active Illinois-based hedge fundmanagers. 119bnChicago also contains 74% of all active hedge fund managersbased in Illinois, with 140 firms based in the city. New York City(1,176) and San Francisco (173) are the only cities in the US thatare home to more fund managers.Foundations and private sector pension funds each form asignificant proportion (21%) of the investors active in Illinois (Fig.23). Among these is Boeing Company Pension Fund which investsmore than 6.4bn in hedge funds (Fig. 24).Size of the Illinois hedge fund industry.196Number of Illinois-based institutionalinvestors active in hedge funds.CHICAGONumber of hedge fund managers based inChicago.Fig. 22: Illinois-Based Hedge Funds by Top-Level Strategy 357mnEquity Strategies6%3% 3%Managed Futures/CTAAverage current allocation to hedge funds ofan Illinois-based insitutional investor activein the asset class.Relative Value Strategies7%37%11%Multi-Strategy1.65%Event Driven StrategiesAverage management fee charged by Illinoisbased hedge funds.Credit StrategiesNiche Strategies11%140Macro Strategies22%Alternative Risk PremiaSource: PreqinFig. 23: Illinois-Based Investors Active in Hedge Funds by TypeFoundation6%2%Private Sector PensionFundEndowment Plan6%21%8%Fund of Hedge FundsManagerFamily Office8%InvestorCurrent Allocation to HF( mn)Boeing Company Pension Fund6,440Teachers' Retirement System of the State ofIllinois6,126General Electric Pension Trust2,470Source: PreqinWealth ManagerFig. 25: Largest Illinois-Based Hedge Fund Managers by Assetsunder ManagementPublic Pension FundManager21%12%Fig. 24: Largest Illinois-Based Institutional Investors by CurrentAllocation to Hedge FundsAsset Manager17%OtherSource: PreqinAssets underManagement ( mn)Citadel Advisors27,100Calamos Investments20,100Magnetar Capital13,700Source: Preqin9
PREQIN SPECIAL REPORT: HEDGE FUNDS IN THE USTEXASTexas is home to only 170 institutional investors in hedge funds.However, these investors have significant sums dedicated tothe industry: on average, investors in the state currently allocate 553mn to hedge funds, the highest level among the 10 featuredstates. The largest single allocator to hedge funds in the US,Teacher Retirement System of Texas, is located in the state, andinvests nearly 15bn in hedge funds (Fig. 28).IN NUMBERS231Number of active Texas-based hedge fundmanagers. 83bnThere are only three Texas-based fund managers with over 10bnin AUM; combined, these three firms make up 35% of the totalAUM within the state.Size of the Texas hedge fund industry.170Number of Texas-based institutionalinvestors active in hedge funds.7thTeacher Retirement System of Texas is thelargest allocator to hedge funds in the USand seventh largest in the world.Fig. 26: Texas-Based Hedge Funds by Top-Level StrategyEquity Strategies6% 1% 1.2bnCredit Strategies6%Average target allocation to hedge fundsamong Texas-based institutional investorsactive in the asset class.Managed Futures/CTA8%Relative Value Strategies48%9%Multi-Strategy 14bnMacro StrategiesAUM of Salient Partners, the largest Texasbased hedge fund manager (as at 31 May2018).Event Driven Strategies11%Niche Strategies11%Alternative Risk PremiaSource: PreqinFig. 27: Texas-Based Investors Active in Hedge Funds by TypeFoundation1%Private Sector PensionFundEndowment Plan4%11%24%Wealth Manager14%12%12%12%Family OfficeFund of Hedge FundsManagerAsset ManagerOtherSource: PreqinCurrent Allocation to HF( mn)InvestorTeacher Retirement System of Texas14,804University of Texas Investment ManagementCompany11,025Texas County & District Retirement System6,591Source: PreqinPublic Pension Fund11%10Fig. 28: Largest Texas-Based Institutional Investors by CurrentAllocation to Hedge FundsFig. 29: Largest Texas-Based Hedge Fund Managers by Assetsunder ManagementManagerAssets underManagement ( mn)Salient Partners14,025HBK Capital Management10,717Maverick Capital10,700Source: Preqin Preqin Ltd. 2018 / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/HFUS18NEW JERSEYNew Jersey is home to 77 investors active in hedge funds.Investors in the state currently allocate an average of 17.1%of their assets to hedge funds.IN NUMBERS146Number of active New Jersey-based hedgefund managers.Only one New Jersey-based fund manager, AppaloosaManagement, manages over 10bn in assets (Fig. 33); this firmaccounts for 23% of AUM across the state as a whole. 67bnNew Jersey-based investors have, on average, 25bn undermanagement, which is the second largest average of any state inthe US. The largest of these investors is the insurance companyPrudential Financial, which holds approximately 1.4tn in AUM.Size of the New Jersey hedge fund industry.77Number of New Jersey-based institutionalinvestors active in hedge funds.17.1%Fig. 30: New Jersey-Based Hedge Funds by Top-Level StrategyAverage current allocation to hedge fundsamong New Jersey-based investors (as a % oftotal assets).Equity Strategies6% 1%Managed Futures/CTA7%31%9%19.18%Credit StrategiesAverage performance fee charged by NewJersey-based hedge funds.Event Driven StrategiesRelative Value Strategies11%5.45%Multi-StrategyMacro Strategies18%18%Three-year annualized net return of NewJersey-based hedge funds (as at May 2018).Niche StrategiesAlternative Risk PremiaSource: PreqinFig. 31: New Jersey-Based Investors Active in Hedge Funds byType1% 4%3%23%9%Fig. 32: Largest New Jersey-Based Institutional Investors byCurrent Allocation to Hedge FundsInvestorCurrent Allocation to HF( mn)Private Sector PensionFundFoundationNJ Division of Investment6,300Princeton University Investment Company(Princo)5,783Wealth ManagerPrudential Financial3,222Source: PreqinEndowment Plan9%Family Office13%22%16%Fund of Hedge FundsManagerPublic Pension FundAsset ManagerOtherSource: PreqinFig. 33: Largest New Jersey-Based Hedge Fund Managers byAssets under ManagementManagerAssets underManagement ( mn)Appaloosa Management18,315Onex Credit Partners9,677Jacobs Levy Equity Management7,699Source: Preqin11
PREQIN SPECIAL REPORT: HEDGE FUNDS IN THE USFLORIDAOne-hundred and forty institutional investors allocate capitalto hedge funds from within Florida’s borders. The averageallocation to hedge funds of these investors is 142mn, the lowestamong the 10 featured states, with the largest investor in theSunshine State, Florida State Board of Administration, currentlyallocating 5.3bn to the asset class (Fig. 36).IN NUMBERS163Number of active Florida-based hedge fundmanagers. 48bnThe 163 Florida-based fund managers are collectively responsiblefor 48bn in AUM. The largest fund manager, Bayview AssetManagement, has 13bn in AUM (Fig. 37).Size of the Florida hedge fund industry.140Number of Florida-based institutionalinvestors active in hedge funds. 2.4mnAverage minimum investment set by Floridabased hedge fund managers.Fig. 34: Florida-Based Hedge Funds by Top-Level Strategy 13bnEquity Strategies7% 1%Credit Strategies7%31%8%AUM of Bayview Asset Management, thelargest Florida-based hedge fund manager(as at 31 May 2018).Multi-StrategyManaged Futures/CTA13.4%Relative Value StrategiesMacro Strategies13%Average target allocation to hedge fundsamong Florida-based institutional investorsactive in the asset class.Event Driven Strategies19%14%Niche StrategiesAlternative Risk PremiaSource: PreqinFig. 35: Florida-Based Investors Active in Hedge Funds by Type1%8% 1%26%9%17%12%Florida State Board of Administration5,328Public Pension FundAlfred I. duPont Testamentary Trust1,200Guggenheim Partners Latin America537Family OfficePrivate Sector PensionFundWealth ManagerAsset Manager15%OtherSource: Preqin12Current Allocation to HF( mn)InvestorFoundationFund of Hedge FundsManagerEndowment Plan11%Fig. 36: Largest Florida-Based Institutional Investors by CurrentAllocation to Hedge FundsSource: PreqinFig. 37: Largest Florida-Based Hedge Fund Managers by Assetsunder ManagementManagerAssets underManagement ( mn)Bayview Asset Management13,000Fairholme Capital Management4,800III Capital Management4,730Source: Preqin Preqin Ltd. 2018 / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/HFUS18PENNSYLVANIAThere are 158 Pennsylvania-based institutional investorsallocating capital to hedge funds, almost twice the number (87)of hedge fund managers based in the state.IN NUMBERS87Number of active Pennsylvania-based hedgefund managers.Endowment plans make up a larger proportion of investors inPennsylvania than in other states – a quarter of all investors inthe state invest on behalf of university endowments – followed byfoundations (23%, Fig. 39). Investors typically allocate an averageof 265mn to the asset class. 19bnSize of the Pennsylvania hedge fund industry.The largest proportion (51%) of Pennsylvania-based funds employequity strategies, followed by credit strategies (14%) and relativevalue strategies (10%, Fig. 38). The average management feecharged by Pennsylvania-based fund managers is 1.32%, thesecond lowest of the 10 featured states.158Number of Pennsylvania-based institutionalinvestors active in hedge funds. 7.1bnAUM of Brandywine Global InvestmentManagement, the largest Pennsylvania-basedhedge fund manager (as at 31 May 2018).Fig. 38: Pennsylvania-Based Hedge Funds by Top-Level StrategyEquity Strategies4%1%4%Credit Strategies7% 8.0bnRelative Value StrategiesAverage AUM of Pennsylvania-basedinstitutional investors active in the assetclass.Event Driven Strategies8%51%Managed Futures/CTA4.76%Macro Strategies10%Multi-Strategy14%Three-year annualized net return ofPennsylvania-based hedge funds (as at May2018).Niche StrategiesAlternative Risk PremiaSource: PreqinFig. 39: Pennsylvania-Based Investors Active in Hedge Funds byType1%4%7%4%25%8%10%23%InvestorCurrent Allocation to HF( mn)Endowment PlanPennsylvania Public School Employees'Retirement System5,276FoundationVeritable3,314Private Sector PensionFundFund of Hedge FundsManagerFamily OfficeUniversity of Pennsylvania Endowment2,912Public Pension Fund18%Fig. 40: Largest Pennsylvania-Based Institutional Investors byCurrent Allocation to Hedge FundsWealth ManagerAsset ManagerOtherSource: PreqinSource: PreqinFig. 41: Largest Pennsylvania-Based Hedge Fund Managers byAssets under ManagementManagerAssets underManagement ( mn)Brandywine Global Investment Management7,413Stevens Capital Management2,015FS Investments1,780Source: Preqin13
PREQIN SPECIAL REPORT: HEDGE FUNDS IN THE USVIRGINIAOf the 45 Virginia-based hedge fund managers, the largest isAkre Capital Management, with AUM of 7.9bn (Fig. 45).IN NUMBERS45Equity strategies are employed by the largest proportion (41%)of funds, while managed futures/CTA vehicles account for 21% offunds in the state (Fig. 42).Number of active Virginia-based hedge fundmanagers. 17bnThere are almost twice as many Virginia-based institutionalinvestors (87) compared to fund managers, and on average, theseinvestors allocate 415mn to hedge funds.Size of the Virginia hedge fund industry.87Number of Virginia-based institutionalinvestors active in hedge funds.1.33%Average management fee charged byVirginia-based hedge funds.Fig. 42: Virginia-Based Hedge Funds by Top-Level StrategyEquity Strategies1%2%3% 415mnManaged Futures/CTA14%Average current allocation to hedge fundsamong Virginia-based insitutional investorsactive in the asset class.Multi-Strategy41%Event Driven Strategies53%Credit Strategies18%Two of the 45 Virginia-based hedge fundmanagers hold over half of the state’s totalAUM between them.Macro StrategiesRelative Value StrategiesNiche Strategies21%Alternative Risk PremiaSource: PreqinFig. 43: Virginia-Based Investors Active in Hedge Funds by Type5%1%3%7%31%8%9%14%22%Current Allocation to HF( mn)InvestorFoundationVirginia Retirement System8,057Endowment PlanInvesture3,583Spider Management Company1,953Private Sector PensionFundWealth ManagerSource: PreqinFund of Hedge FundsManagerPublic Pension FundFig. 45: Largest Virginia-Based Hedge Fund Managers by Assetsunder ManagementAsset ManagerManagerFamily OfficeOtherSource: Preqin14Fig. 44: Largest Virginia-Based Institutional Investors by CurrentAllocation to Hedge FundsAssets underManagement ( mn)Akre Capital Management7,900EJF Capital3,200Quantitative Investment Management3,100Source: Preqin Preqin Ltd. 2018 / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/HFUS18OTHER STATESThe 10 states* featured in this report account for three-fifthsof the total capital invested in hedge funds by US-basedinvestors, as shown in Fig. 46. The largest state outside these 10featur
Fig. 6: New York-Based Hedge Funds by Top-Level Strategy 24% 21% 14% 13% 11% 8% 3% 1% 5% Fund of Hedge Funds Manager Foundation Family Office Endowment Plan Private Sector Pension Fund Wealth Manager Asset Manager Public Pension Fund Other Source: Preqin Fig. 7: New York-Based Investors Active in Hedge Funds by Type
Source: Preqin Hedge Fund Online Hong Kong, home to 63bn of hedge fund AUM and 368 fund managers, is the centre of the hedge fund industry in Asia Paci c. In fact it is the third largest country globally, in terms of hedge fund capital managed, behind the US and the UK. Hong Kong has been a longestablished centre for hedge fund activity;
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2018 PREQIN GLOBAL HEDGE FUND REPORT - SAMPLE PAGES They say that a week is a long time in politics; well, a year is certainly a long time in hedge funds.My foreword to Preqin’s 2017 Global Report reflected on the extended period of disappointing returns that had sta
THE FUTURE OF ALTERNATIVES 4 Preqin Ltd. / www.preqin.com W elcome to 'The Future of Alternatives', Preqin's crystal ball assessing the likely size, shape and make-up of the global alternative assets industry (meaning private capital plus hedge funds) in 2023. What will our industry look like in fi ve years' time?
2 THE CONCEPT OF HEDGE FUNDS 6 3 TYPOLOGY OF HEDGE FUNDS 8 4 CHARACTERISTICS OF THE HEDGE FUND INDUSTRY 11 4.1 Location of hedge funds and their managers 11 4.2 Incentive structure and failure rates 17 4.3 Parties involved 18 4.4 Investors 19 4.5 Fund size 20 5 RECENT EVOLUTION OF THE HEDGE FUND BUSINESS 22 6 FINANCIAL STABILITY IMPLICATIONS 25
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Section I Hedge Funds. 9 2. Introduction to Hedge Funds 11 3. Establishing a Hedge Fund Investment Program 37 4. Selecting a Hedge Fund Manager 57 5. Due Diligence for Hedge Fund Managers 69 6. Risk Management Part 1: Hedge Fund Return Distributions 93 7. Risk Management Part II: Additional Hedge Fund Risks
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