European pension funds and insurance companies have increasingly turned to London-based hedge funds, doubling the size of the U.K. industry's market share of the entire hedge fund universe in just three years, according to Bloomberg. 

London's 700 hedge funds represented 75% of the European and 20% of the global hedge fund markets in 2005.  U.K. capital captured only 10% of the global hedge fund market in 2002, according to the International Financial Services of London trade group. In terms of assets under management, in 2002, British hedge funds held $61 billion.  In 2005, hedge funds in London managed $225 billion. 

The IFSL credits the growth to pensions and insurance companies, even outside of England, looking to the riskier vehicles to make money despite falling markets.

"There is a move by pension funds and insurance funds in Europe that is benefiting London hedge funds," IFSL representative Marko Maslakovic told Bloomberg.

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