London's hedges: bigger, longer and uncut

You remember the showers after High School gym; looking but not looking. If you wondered if bigger was really better, London’s biggest hedge fund managers are pulling away from the rest of the pack as investors favor larger players, according to a new ranking published today.

Some big asset managers have produced asset growth of 50 per cent and in some cases 100 per cent in the past year, according to EuroHedge, the industry publisher.

EuroHedge’s ranking shows Man Group as Europe’s biggest hedge fund manager of single-strategy assets, with $16.2 billion (£8.6 billion) under management, closely followed by GLG and BlueCrest.

Institutional investors such as pension funds are replacing rich individuals as the main sources of new money. They are drawn more to larger firms with well-known names and seemingly better risk management systems and operational controls.

Hedge fund assets managed in Europe grew by 23 per cent to $401 billion between January and June and were 44 per cent higher than a year earlier. The growth is mainly a result of inflows of fresh funds. Investment performance has been pedestrian in recent months. More than 170 new hedge funds were launched in Europe in the first half of 2006, attracting $11.5 billion.

London’s dominance of the industry in Europe intensified with the City lifting its share of total assets from 76 per cent to 79 per cent.

http://business.timesonline.co.uk/article/0,,9063-2384417,00.html