Returns Down, Assets Up And Hedge Fund Managers Still Smiling About That Two-Percent

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Assets managed by hedge funds went up by thirty percent, even as returns trailed, in 2006, a HedgeFund Intelligence survey says. The total assets under management now exceeds $2 trillion.
Although hedge fund fee structures vary widely, a typical industry fee charges investors twenty percent of the profits and an additional two percent fee for total assets under management. Two percent of $2 trillion amounts to a lot of Bentleys, Italian shoes and watches for the type of people who never look at their wrists for the time but still like the status of having something Swiss clinking against their cufflinks.
The US still dominates the hedge fund industry, in terms of total assets under management, but Europe has seen the biggest growth, according to the study. Which is one reason why the regulation of hedge funds has received so much attention in Europe lately. More money, more problems, as one of the guys who talk DealBreaker how to manage money once said.
A huge source of growth has been mutual funds and institutional investors, who poured billions into hedge funds last year, despite the anemic growth in the industry. As another study points out, there are still plenty of wealthy individuals who don’t have money in hedge funds, meaning the marketplace for raising funds from individual high net-worth investors remains wide-open.
Hedge Fund Assets Rise 30% to $2 Trillion Worldwide [Bloomberg]

Many wealthy not attracted to hedge funds

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