Hedge funds’ assets climb to $2.3 trillion: study

Single-manager hedge funds withstood market swings and regulatory reforms in the first half of 2012, with reported assets under management rising by 5.23% to $1.892 trillion, says a study by PerTrac.

The company found a continued decline in the reported AUM of funds of hedge funds. The amount invested in these vehicles, which allocate exclusively to hedge funds, declined by 4.92% during the first half of the year. The slide was caused by the decline in the number of funds reporting information to databases.

Despite this drop, though, the reported amount invested within the hedge fund industry this year—including funds of hedge funds and single-manager hedge funds—climbed to $2.317 trillion in the first six months of the year.

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The total number of funds reporting to databases rose by 4.61% to 14,013. The jump was led by single-manager hedge funds, which saw a 75% increase in the number of small and start-up funds on the market. These offerings have less than $25 million in AUM.

The report suggests asset allocators have a growing interest in alternative investments. They’re also increasingly investing directly in hedge funds, which have seen more than three years of steady growth.

“Investors still see the long-term value of hedge funds,” says Brendan Dolan, president of PerTrac.

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Investors favor the largest funds; the “billion dollar club” of single-manager hedge funds overseeing more than $1 billion saw AUM increase to $1.15 trillion from $1.08 trillion in 2011.

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These billion-dollar funds represent 61% of all assets invested in single-manager funds to date.

The PerTrac study aggregates information from 11 leading global databases.