Private wealth inflows buoyed the hedge fund sector powering assets to breach the $2.9 trillion mark over the year to June.
Total assets in the hedge sector have risen from $2.7 trillion at the end of 2013. The data from Preqin is based on a survey of more than 100 hedge fund managers conducted in June, which found that 59% of managers with backing from high net worth individuals saw increased inflows from this segment of investors over the first half of the year.
The inflow from high net worth investors has caused the ownership of hedge fund assets by institutional investors to decrease 2% over the first half of the year to 63%.
Around 47% of respondents with retail clients also reported increased inflows from this segment, particularly through Ucits funds. Around 61% of hedge fund managers that run alternative Ucits funds said they had posted net inflows, while 51% noted the same trend in the alternative mutual funds they run.
The growing interest from retail and high net worth clients has led to an expansion of products and structures offered by hedge fund managers, which Preqin anticipates will continue over the coming years.
'Interest from a wider group of investors, particularly those in the private wealth arena and retail clients, is leading to a proliferation of new structures, in particular liquid alternatives, to cater to new markets. This is providing more product options to all hedge fund investors and has been a notable driver in the growth in assets in the hedge fund sector.
'Looking forward to the end of 2014, 77% of the hedge fund managers that participated in our June study stated that they believe industry assets under management will grow further in the second half of the year,' commented Amy Bensted, head of hedge fund products.