NEW YORK (HedgeWorld.com)–Although its growth is less explosive than in previous years, the hedge fund industry is still gaining ground, according to the 2003 World Wealth Report published by Merrill Lynch and Cap Gemini Ernst & Young.
The annual benchmark report found that hedge fund assets under management increased 8% over the course of 2002, bringing the total assets invested in hedge funds to US$650 billion worldwide. Researchers have predicted that the hedge fund industry will be handling US$1.5 trillion by 2010.
Still the pace of growth has slowed. The most recent statistics are a dramatic drop as compared with 2001, when assets jumped an amazing 34% Previous HedgeWorld Story.
According to the research, high-net-worth investors account for 60% of the total hedge fund assets and have driven most of the growth. That growth was lead by investors from Japan, where individuals have allocated to hedge funds to help maintain steady returns. Japanese high-net-worth investors’ pool of assets is the second in size only to that of U.S. investors, who have also been active in the hedge fund investment arena .
Wealthy individual’s prominence in the hedge fund industry may be set to slide though, according to Merrill Lynch and Cap Gemini. The report states that the “percentage held by individual investors is likely to decline as institutional investors are expected to continue to increase hedge fund allocations.”