Hedge Fund Market Size (AUM Value) - By Strategy (Long/Short Equity, Global Macro, Event Driven, Multi Strategy, Long/Short Credit, Managed Futures/CTA, Others), Type (Offshore, Domestic, Fund of Funds), Regional Outlook & Global Forecast, 2024 - 2032

Hedge Fund Market Size

Hedge Fund Market size (AUM value) was valued at USD 5 trillion in 2023 and is estimated to register a CAGR of over 3.5% between 2024 and 2032. Rising hedge fund Assets Under Management (AUM) propels the market growth by attracting increased capital, thus fostering larger and more influential funds. As AUM grows, funds gain enhanced market presence, enabling them to pursue diverse investment strategies and access additional opportunities. This investment contributes to the overall growth and significance of the market, attracting both institutional & individual investors seeking exposure to alternative investments.
 

Investor demand is a pivotal factor propelling the hedge fund market growth with institutional investors and high-net-worth individuals seeking diversification beyond traditional investments. The credibility lies in the potential for higher returns and risk management strategies that can navigate diverse market conditions. As investors increasingly recognize the value of hedge funds in optimizing portfolios and managing risks, the sector will continue to experience growth, attracting a broad range of participants and contributing to the overall market expansion.
 

Ongoing macro and geopolitical concerns can hinder the hedge fund market growth by amplifying market volatility and increasing uncertainties. Heightened geopolitical tensions or economic instability may disrupt traditional investment strategies, challenging hedge funds to navigate unpredictable conditions. Investors may respond by adopting more conservative positions, reducing risk appetite, and potentially reallocating funds away from hedge funds, impacting their performance and asset inflows. Managing these external factors becomes crucial for hedge fund resilience and sustained growth.
 

COVID-19 Impact

The COVID-19 pandemic has had a positive impact on the hedge fund industry, driving increased volatility and creating unique investment opportunities. Hedge funds, adept at navigating complex market conditions, capitalized on market dislocations, distressed assets, and shifting trends. The demand for alternative investments surged as investors sought diversification and risk management during uncertain times. Some hedge funds thrived by strategically positioning portfolios, demonstrating resilience amid market turbulence. Additionally, the accelerated digital transformation prompted by the pandemic facilitated the integration of sophisticated technologies, enhancing operational efficiency within hedge fund management.
 

Hedge Fund Market Trends

Asset management businesses entering the hedge fund sector contribute to the lucrative growth of the hedge fund industry. These strategic moves bring increased capital, expertise, and diversified investment strategies. For instance, in October 2023, ASK Group, backed by private equity Blackstone, entered the hedge fund sector, as part of its strategy, to broaden its presence in alternative investments. The introduction of ASK Hedge Solutions aims to assist investors in diversifying their asset allocation and achieving risk-adjusted returns. This influx of resources and knowledge fosters market expansion, creating opportunities for both traditional and new participants to benefit from the dynamic & evolving landscape of hedge fund investments.
 

The increasing demand for sophisticated risk management techniques is propelling the market growth. Investors are drawn to hedge funds due to their ability to navigate complex market conditions and employ advanced risk mitigation strategies. As financial landscapes become more intricate, the hedge fund's capacity to manage risks effectively becomes a crucial factor in attracting capital. The rising need for such sophisticated risk management approaches positions hedge funds as valuable assets for investors seeking robust strategies in an ever-evolving market environment.
 

Hedge Fund Market Analysis

Based on strategy, the long/short equity segment accounted for 30% of the market share in 2023. The introduction of a new long-short equity strategy through a strategic partnership is driving growth in the market. This initiative strengthens the markets long/short equity segment by combining expertise and resources.
 

For instance, in September 2023, Investcorp-Tages, a prominent alternative investment manager, partnered with the Engadine long/short equity team (led by Engadine Partners). This strategic collaboration emphasizes Investcorp-Tages' dedication to providing innovative investment solutions for investors. As hedge funds explore collaborative strategies, the market experiences increased dynamism, offering investors opportunities for enhanced returns and risk management within the long/short equity segment.
 

Based on type, the offshore segment held over 45% of the hedge fund market share in 2023. Tax efficiency and global access are propelling the demand for offshore hedge funds, boosting segment growth. Investors are drawn to the tax advantages offered by offshore jurisdictions, seeking to optimize their tax positions. Simultaneously, these funds provide global access, enabling investors to navigate diverse industries and capitalize on international opportunities. The combination of tax benefits and global reach enhances the appeal of offshore hedge funds, attracting those aiming to efficiently manage tax liabilities while accessing a broad spectrum of global investment possibilities.
 

North America hedge fund market recorded more than 35% of the revenue share in 2023. Prominent fund managers and substantial hedge fund Assets Under Management (AUM) are driving the industry growth. Renowned managers attract investor confidence, while large AUM enhances market liquidity and stability. The presence of such influential players contributes to the region's position as a key global hub for hedge funds. Their expertise, track record, and ability to manage significant capital play a crucial role in sustaining market growth and attracting both institutional & individual investors to the North America market.
 

Hedge Fund Market Share

Major companies operating in the hedge fund industry are:

• Bridgewater Associates
• Man Group
• Renaissance Technologies
• Millennium Management
• Citadel
• D.E. Shaw Group
• Two Sigma Investments/Advisers
• Davidson Kempner Capital Management
• Farallon Capital Management
• TCI Fund Management

Major companies in the hedge fund market are competing for revenue share through strategic partnerships, innovative investment solutions, and the continuous expansion of assets under management. By enhancing offerings to garner a broader investor base and solidify their market positions.
 

Hedge Fund Industry News

• In July 2023, The Scotia Private Client Group introduced the Scotia Long Short Equity Fund, an inaugural alternative investment within its private investment counsel. This fund empowers accredited investors to manage volatility and downside risk while capitalizing on the potential upside of equity market.
   

The hedge fund market research report includes in-depth coverage of the market with estimates & forecast in terms of AMU Value (USD Billion) from 2018 to 2032 for the following segments:

Click here to Buy Section of this Report

Market, By Strategy

• Long/Short Equity
• Global Macro
• Event Driven
• Multi Strategy
• Long/Short Credit
• Managed Futures/CTA
• Others

Market, By Type

• Offshore
• Domestic
• Fund of Funds

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • South Africa
  • Saudi Arabia