MFA Blog

Institutional Investors Almost 65 Percent of Hedge Fund Assets

Posted on January 22, 2015

Hedge funds set new records in 2014, according to the industry research firm Preqin. The firm’s 2015 Global Hedge Fund Report found that more than 4,800 global institutional investors allocate with hedge funds and represent almost 65 percent of the industry’s invested capital. Overall, total capital assets under management increased $355 billion last year.

Despite actions by a few public pension funds in the latter half of 2014, the report found that the over allocations from pensions continued to increase. Public pension plans now account for 20 percent of institutional capital invested with hedge funds. That number almost doubles when you add in private pensions. On average, public pension funds dedicate 7.8 percent of their total portfolio to hedge funds.

To read about the institutional investors using hedge funds to diversify their portfolio and gain risk-based returns, click here.

Preqin notes that new regulations remain a top concern for the industry. Specifically, 53 percent of managers surveyed cited regulations as a key driver of change for the industry. This beat the second driver of change, market volatility, by 11 points.

This lingering regulatory uncertainty is why MFA has worked to champion policies and regulations that ensure markets remain fair, efficient and liquid. MFA has also spent considerable energy working to achieve global regulatory harmonization.

MFA President & CEO Richard H. Baker discussed the Association’s efforts on this front in the report’s regulatory overview, available here.

The report’s key findings are available here and more information about the Preqin report, which was released this week, is available here.