Hedge Fund Industry - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Hedge Fund Industry in terms of assets under management value is expected to grow from USD 4.74 trillion in 2024 to USD 5.47 trillion by 2029, at a CAGR of 3.14% during the forecast period (2024-2029).

Hedge funds are known in the financial industry for their great flexibility and wide range of investment options. Hedge fund managers operate with an absolute return methodology to maximize returns, eliminating risks and often enhancing profitable returns using leverage. Hedge fund managers can take long and short positions in their investments. It allows them to seize more opportunities than traditional mutual fund managers providing profitable investment opportunities even when stock markets are plunging.

The total value of assets managed by hedge funds worldwide reached around USD 4.53 trillion in previous year. Fund managers are also increasingly applying artificial intelligence and machine learning (AIML) techniques to improve operational efficiencies and boost returns. In this industry, the United States was the top country regarding hedge fund assets under management, accounting for three-quarters of the world. The United Kingdom followed with the second-highest assets under management.

The COVID-19 pandemic caused a public health emergency in December 2019, severely affected global economic activity, and was considered a global economic/financial crisis. The effect manifested in increased risk spillover across several financial instruments such as equities, mutual funds, commodities, and cryptocurrencies. When the pandemic hit at the start of 2020, some hedge funds sought to gain from the stock market collapse. The airline sector suffered particularly badly and became a target for short sellers. Hedge funds well-positioned in anticipation of the market shock made significant profits during this period.

Hedge Fund Market Trends

Investments in Digital Assets is Driving the Market

Digital asset investments are from high-net-worth investors at present. Institutional investors are continuing to show interest, with several large institutional players penetrating the crypto space. According to hedge fund analysis, 21% of hedge funds surveyed invested in digital assets. Along with increased regulatory clarity and sound operational practices, and expected hedge funds to increase their investment in this asset class, 31% of hedge fund managers plan to add cryptocurrency to their portfolios within the next two years.

Recovering Performance, Despite Challenging Market Conditions

The hedge funds industry seems to consolidate over the years, and fund managers worldwide seem to become more defensive in their strategies.

2021 was an excellent year for hedge funds, with industry AUM (assets under management) surging past the USD 4 trillion mark. In 2021, pension funds were anticipated to represent over one-third of the industry's assets under management (AUM). As industry operators garner revenue as an AUM share, increases in demand from this key market tend to boost the industry's performance. Multi-Strategy and Quant Equity hedge funds are once again among the most favorable. Another strategy that saw a dramatic change in sentiment is Generalist Equity. It may be low relative to the other Equity hedge fund strategies, including Sector-Specific, Market Neutral, and Quant Equity.

Hedge Fund Industry Overview

The report includes an overview of the largest hedge funds by assets managed and major digital asset hedge funds. Some of the major players dominating the market studied are presented here, BridgeWater Associates, AQR Capital Management, Man Group Plc, Renaissance Technologies LLC and Two Sigma Investments

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support