Although hedge funds didn’t deliver stellar returns in 2006, many of them trailing major stock indexes, their assets rose 30% to $2 trillion worldwide, Bloomberg reports, citing a report from HedgeFund Intelligence. Last year, the average hedge fund returned 13%, compared to the S&P 500 Index’s 16% return and the MSCI World Index’s 21% gain.

The fastest-growing hedge fund market is in Europe, with its hedge fund assets rising 41.5% in 2006 to $260 billion, according to the report. More than 350 managers have assets of $1 billion or more, collectively controlling $1.6 trillion. Half of them are in the U.S., 105 in Europe and 35 in Asia.

By comparison, however, mutual funds in Europe and the U.S. have $20.5 trillion under management.

“An increasing proportion of hedge fund assets comes from institutional investors, and half of the industry’s assets are invested through funds of hedge funds, with portfolios that include a mix of other hedge funds,” according to the report.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.