Growth in the Hedge Fund Industry is Slowing

NEW YORK, Feb. 15, 2023 /PRNewswire/ -- New research from quant technology provider SigTech, drawing on data from Preqin and insights from various hedge fund managers, reveals that roughly 30,000 hedge funds are currently operating globally*. The US dominates the industry with a market share of 65%, followed by the UK (8.8%) and Hong Kong (3.5%).

 While the industry is growing, following a record 2000+ hedge fund launches in both 2020 and 2021, last year witnessed the lowest number of launches since 2010, with ca. 900 new funds. 

'One possible explanation for this fall is found in the continued rise of large multi strategy funds. These funds are in high demand by institutional investors and have also become an attractive alternative for portfolio managers wanting to strike out on their own,' said Daniel Leveau, SigTech's VP of Investor Solutions.

In terms of investment styles, the discretionary approach is still the most commonly applied (53%). However, quantification remains a clear trend, with roughly one third of hedge funds applying a hybrid discretionary and systematic approach. 14% of funds apply a fully systematic approach.

'Consistent with the consensus belief that macro themes will continue to drive asset prices over the coming years, investment managers we speak to are increasingly adding macro strategies to their funds,' Leveau continues. 'In addition, we see an expanding use of quant analytics across most hedge fund strategies.' 

Other key findings include:

• Equity long/short remains the largest hedge fund category (26.9%)
• With 121 new funds, crypto was the second most popular category for fund launches
• Delaware, US (36%) and the Cayman Islands (31%) continues to be the preferred legal jurisdiction for hedge funds

Gain further insights into the structure and current trends of the hedge fund industry by clicking here. 

* Data sourced from Preqin Ltd as per mid-January 2023

Contact details
Angela Ceccarelli, VP, Global Head of Marketing
[email protected]

About SigTech

SigTech offers quant technologies in a SaaS platform to hedge funds, asset managers and asset owners who can focus on beating the market. 

SigTech specializes in macro strategies and cross asset allocation with operationally-ready datasets across a wide range of financial instruments. Our platform ingests, cleans and validates financial data, and provides the tools to research, build, and deploy customized strategies – providing users an edge in alpha generation. 

www.sigtech.com

SOURCE SIG Technologies (US) LLC