2012 Hedge Fund Business Expense Survey (Citi)

December 2012

KEYWORDS: Survey, assets under management, Hedge Fund IT, Hedge Fund Managers, Third-party administrator, hedge fund expenses, hedge funds, Asian Hedge Funds, European, North America

Authors:

Citi Prime Finance

Organizations:
  • Citi

Summary:

Citi Prime Finance examines the business expenses related to running a hedge fund.  According to results of the survey, “Hedge fund manager expenditures on support personnel and third-party expenses are estimated at $14.1billion, or the equivalent of 65 basis points of total industry AUM.”  The survey also notes that because these costs are proportionally higher on smaller hedge funds than they are on larger ones, hedge funds should have between $250 million and $375 million in assets under management to cover these expenses on management collections alone.  As most hedge funds grow, the survey notes, they are able to bring more and more functions in house and increase their staff, thus decreasing their reliance on third-party functions.  These expenses include marketing, investor relations, risk and compliance, operations, technology, and business management.

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