European Alternative Investment Overview, Part I: Hedge Funds and Property Funds

August 25, 2005

Abstract

Paris, France August 25, 2005

Celent projects that hedge fund closures will rise in 2005 and 2006 as new investors flood the market with too much cash.

The world of alternative investment funds is hot洋oney has poured into hedge funds and property funds at an accelerated pace in 2004 and 2005, as investors chase above-average returns in a lackluster market. While the US is the leader in hedge fund assets under management, Europe is a major player. Europe accounts for more than US$230 billion in hedge fund assets under management, out of a global total in excess of US$1 trillion. In property investing, the European market is more established than the US market, and equals its assets under management of US$340 billion.

In a new report, , Celent provides an overview and analysis of key market trends, identifying leading industry players and discussing prospects for future growth. It examines the forces that will make it harder for many players in the alternative investment field to continue to achieve the above-average risk-adjusted returns that have made them such a popular class of investments and analyzes the threat to the different classes of funds.

"While the hedge fund industry will continue to increase assets under management, returns in 2005 and 2006 will suffer, as too much money is chasing the same set of investment strategies," says Lauren Bender, senior analyst in Celent痴 Securities and Investments group and author of the report. "We will see the number of midsize firms decrease sharply, as large funds continue to take the lion痴 share of new assets and as small, agile newcomers take advantage of new strategies before the rest of the industry follows."

Over time, Celent expects to see the lines between the various alternative investment funds continue to blur, eventually resulting in large, "alternative investment" funds that are free to pursue multiple strategies within the same fund as the market evolves.

The report includes tables listing the largest European hedge fund managers, hedge fund of fund managers, and property managers. The primary countries covered are the United Kingdom, Switzerland, France, Germany, and the Netherlands.

This report is the first of a two-part series on European alternative investment funds. Part I focuses on European Hedge Funds, Hedge Funds of Funds, and Property funds. Part II will focus on Private Equity funds and Venture Capital funds.

The 36-page report contains 15 charts and 4 tables. A table of contents is available online.

All Members of Celent's Institutional Securities & Investments research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Paris, France August 25,  2005

European Alternative  Investment Overview, Part I

Return to report Abstract

Executive Summary 3
Alternative Investments: An Overview 4
  Overview 4
  Market Size 5
  Investors 7
  Returns Threatened 7
Hedge Funds 8
  Defining A Hedge Fund 8
  The Investors 8
  Market Size 9
  Historical Performance 10
  Compensation 12
European Hedge Funds 14
  The UK Reigns in Europe 15
  The Funds 16
Hedge Funds of Funds 18
  Europe is a Leader in Hedge Funds of Funds 19
Key Trends 22
  Investment Trends 22
  Performance Trends 22
  Industry Trends 24
  Technology Trends 26
Property Funds 27
  Europe Leads 27
  Institutional Investors Dominate 28
  The TOP Funds 28
  The Listed Market is Still Insignificant 30
  Key Trends in Property Investing 30
Conclusion 32
Objectivity & Methodology 34

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