London retains top hedge fund spot in Europe

Date: Thursday, October 6, 2011
Author: Martin Leonard, COO Connect

London remains the largest European centre for hedge funds and is second only to New York globally, according to the 2011 Fund Management survey by The City UK, an organisation which promotes UK business interests.

London’s share of hedge funds has more than doubled over the last 10 years and accounts for 19% of the global total. Approximately four fifths of the $423 billion European hedge fund industry is managed out of the UK.

Meanwhile, New York has seen its hedge fund share fall from a high of more than 50% in 2002 to around 43% in 2010. However, London has also seen a slight fall from 2009.

There have been concerns that London’s hedge fund industry could suffer if the European Union (EU) gets its way by stifling the alternatives industry. Legislation such as the EU’s Alternative Investment Fund Managers Directive (AIFMD) and short-selling restrictions has prompted speculation that managers might leave the EU.

Total hedge fund assets currently stand at over $2 trillion, according to data from the Chicago-based Hedge Fund Research.