During the past decade, the global hedge fund market has ballooned from less than $200bn in assets to more than $1,000bn, and the number of total hedge funds has soared to more than 8,000. On any given day in markets around the world, hedge funds now account for a majority of the trading volume. Once the enclave of the super-wealthy, they have become popular among a broader swath of individual investors and small institutions. For example, German investors can buy hedge funds from Deutsche Bank in units of less than €125 ($150) and UK regulators are considering reducing restrictions on marketing hedge funds to individuals.
One of the main catalysts behind this growth is a sub-category known as funds of hedge funds. Whereas hedge funds seek high returns through a variety of investment strategies, FOFs are vehicles that simply invest in anywhere from five to 50 hedge funds. Some FOFs carry investment minimums as low as $50,000, compared with $5m minimums for most hedge funds. Today, FOFs hold approximately 45 per cent of all hedge fund assets and account for more than 60 per cent of all hedge fund sales
See full Article.
Posts
