HFs In Superleague Of Their Own

Date: Tuesday, October 30, 2007
Author: Hedge Fund Daily

The largest hedge funds appear well on their way to dominating the world of HFs. According to research by Morgan Stanley, the bigger they are, the harder they make it for their smaller brethren to survive. “We see the ‘superleague’ taking share as larger platforms offer greater capacity, broadening fund offering and fiduciary reassurance,” says Huw van Steenis, who heads MS’ asset management/diversified financial groups in an interview with Financial News. Van Steenis noted that the top 100 biggest hedge funds now represent two-thirds of total industry assets, up from 49% just four years ago. And the fall guys are the small fries when it comes to raising money as a result. The MS research reveals that last year the biggest hedge funds experienced just a 6% shortfall in their fundraising, down from 21% in 2004, while start-ups fell short by 64%, triple the 21% rate just three years ago. Morgan Stanley says the gap is even wider among funds of hedge funds, where the six largest –UBS, Man Group, Union Bancaire Privee, Permal/Legg Mason, HSBC and GAM/Julius Baer--have  enjoyed a compounded growth rate of 39% this year, while only two among the firms rounding out the top 20 – namely The Blackstone Group and Gottex – have matched that feat.