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Hedge Fund Clients Add $21 Billion Through June

Monday, 12 Sep 2011 07:27 PM

The world’s biggest hedge fund investors, including Blackstone Group LP, UBS AG’s money- management unit and HSBC Alternative Investments Ltd., added $21 billion to the pools in the first half, according to a survey by Hedge Fund Intelligence’s InvestHedge magazine.

Funds of hedge funds, which charge clients money to pick funds, increased assets under management by 3.3 percent through June to $655 billion, compared with a 0.6 percent decline to $595 billion in the first six months of 2010, the publication said in a statement to be released today. The survey excluded firms that managed less than $1 billion.

Investors have questioned the extra layer of fees charged by funds of funds since 2008, when the firms lost more money on average than hedge funds. Among companies managing more than $1 billion, asset growth in the first half of this year has increased fastest at firms with “stellar performance” in 2010, InvestHedge Editor Niki Natarajan said.

“Performance counts,” she said in the statement. “Looking at the names of firms that have continued to do well, it is clear to see that while some of the industry is continuing to suffer a period of low self-esteem, there are still a good number of groups who know what their purpose is.”

The amount of money managed by New York-based Blackstone’s Alternative Asset Management unit has increased $4.3 billion since the end of 2010 to $37.2 billion, InvestHedge said. UBS Global Asset Management’s assets rose $3.3 billion to $30.82 billion, while HSBC Alternative Investments’ increased $1.78 billion to $29.8 billion, InvestHedge said.

Funds of funds on average lost 1.9 percent in the year through August, while hedge funds are down 1.2 percent, according to Chicago-based Hedge Fund Research Inc. Funds of funds declined 21 percent in 2008 after the collapse of Lehman Brothers Holdings Inc. triggered a global credit crunch. Hedge funds had their worst year ever in 2008, falling 19 percent.

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