Hedge Fund Industry Market Size (2024 - 2029)

The market size of the hedge fund industry, based on the value of assets under management, is projected to experience growth over the forecast period. This sector is recognized for its flexibility and broad array of investment options, with hedge fund managers employing an absolute return methodology to maximize returns, mitigate risks, and often enhance profitable returns through leverage. The industry is also seeing an increase in the application of artificial intelligence and machine learning techniques to improve operational efficiencies and boost returns. The impact of the COVID-19 pandemic on global economic activity led to increased risk across multiple financial instruments and opportunities for some hedge funds to profit from stock market collapses.

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Market Size of Hedge Fund Industry

Hedge Fund Industry Summary
Study Period 2020 - 2029
Market Size (2024) USD 4.74 Trillion
Market Size (2029) USD 5.47 Trillion
CAGR (2024 - 2029) 3.14 %
Fastest Growing Market North America
Largest Market North America

Major Players

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*Disclaimer: Major Players sorted in no particular order
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Hedge Fund Market Analysis

The Hedge Fund Industry in terms of assets under management value is expected to grow from USD 4.74 trillion in 2024 to USD 5.47 trillion by 2029, at a CAGR of 3.14% during the forecast period (2024-2029).

Hedge funds are known in the financial industry for their great flexibility and wide range of investment options. Hedge fund managers operate with an absolute return methodology to maximize returns, eliminating risks and often enhancing profitable returns using leverage. Hedge fund managers can take long and short positions in their investments. It allows them to seize more opportunities than traditional mutual fund managers providing profitable investment opportunities even when stock markets are plunging. 

The total value of assets managed by hedge funds worldwide reached around USD 4.53 trillion in previous year. Fund managers are also increasingly applying artificial intelligence and machine learning (AIML) techniques to improve operational efficiencies and boost returns. In this industry, the United States was the top country regarding hedge fund assets under management, accounting for three-quarters of the world. The United Kingdom followed with the second-highest assets under management.

The COVID-19 pandemic caused a public health emergency in December 2019, severely affected global economic activity, and was considered a global economic/financial crisis. The effect manifested in increased risk spillover across several financial instruments such as equities, mutual funds, commodities, and cryptocurrencies. When the pandemic hit at the start of 2020, some hedge funds sought to gain from the stock market collapse. The airline sector suffered particularly badly and became a target for short sellers. Hedge funds well-positioned in anticipation of the market shock made significant profits during this period.

Hedge Fund Industry Segmentation

A hedge fund is a pooled investment fund that trades in relatively liquid assets and can extensively use more complex trading, portfolio construction, and risk management techniques to improve performance, such as short selling, leverage, and derivatives.

The Hedge Fund Industry Is Segmented By Core Investment Strategies (Equity, Macro, Event-Driven, Credit, Relative Value, Niche, Multi-Strategy, Managed Futures/CTA Strategies, And Others) And Fund Managers Locations (North America, Europe, Asia-Pacific, Latin America, And Middle East And Africa). The Market Size And Forecasts Are Provided In Value (USD) For All The Above Segments.

By Core Strategy
Equity Strategies
Macro Strategies
Event Driven Strategies
Credit Strategies
Relative Value Strategies
Niche Strategies
Multi-Strategy
Managed Futures/CTA Strategies
By Manager Location
North America
United states
Canada
Mexico
Europe
United Kingdom
Sweden
France
Switzerland
Rest of Europe
Asia-Pacific
Hong Kong
Australia
Rest of Asia-Pacific
Latin America
Brazil
Rest of Latin America
Middle East and Africa
United Arab Emirates
Saudi Arabia
Rest of Middle East and Africa

Hedge Fund Industry Size Summary

The Hedge Fund Industry is slated to witness considerable growth in the coming years, with an increase in the value of assets under management. This sector is recognized for its flexibility and wide range of investment options, with hedge fund managers using an absolute return methodology to maximize returns. They can take both long and short positions in their investments, enabling them to seize more opportunities than traditional mutual fund managers. Furthermore, the industry is increasingly leveraging artificial intelligence and machine learning techniques to boost operational efficiencies and returns. The industry has also been impacted by the COVID-19 pandemic, with some hedge funds gaining from the stock market collapse. Current market trends indicate a growing interest in digital asset investments, particularly from high-net-worth and institutional investors. Despite challenging market conditions, the industry has seen a recovery in performance, with assets under management surging. This has been driven by increased demand from key markets like pension funds. The industry is also witnessing a consolidation, with fund managers adopting more defensive strategies. Major players in the market include BridgeWater Associates, AQR Capital Management, Man Group Plc, Renaissance Technologies LLC, and Two Sigma Investments.

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Hedge Fund Industry Market Size - Table of Contents

  1. 1. MARKET DYNAMICS

    1. 1.1 Market Overview

      1. 1.1.1 A Brief about Hedge Funds - Key Activities, Metrics, and Operating Structure

      2. 1.1.2 Asset Flow Trends into Hedge Funds

      3. 1.1.3 A Note on the Largest Hedge Fund Investors worldwide

      4. 1.1.4 Trends Influencing Launches and Liquidations of Hedge Funds

    2. 1.2 Insights on Various Investment Styles of Hedge Funds

    3. 1.3 Impact of Technology on Operating of Hedge Funds

      1. 1.3.1 Increasing Market usage of AIML by Hedge Funds, by Investment Strategy

      2. 1.3.2 Volatility and Sharpe Ratio of AIML Hedge Funds

      3. 1.3.3 Performance of AIML Hedge Funds vs. Systematic Hedge Funds

    4. 1.4 A Note on Digital Asset-based Hedge Funds

      1. 1.4.1 Fund Strategies of Crypto Hedge Funds

      2. 1.4.2 Launches and Asset Flow Trends of Crypto Hedge Funds over the quarters

      3. 1.4.3 Fee Structures across different Strategies of Crypto Hedge Funds

      4. 1.4.4 Insights on Fund Performance and Redemption Periods of Crypto Hedge Funds

    5. 1.5 Regulatory Trends Shaping the Marketplace

    6. 1.6 Market Drivers

      1. 1.6.1 Emerging Demand for Smaller or Newer Fund Managers

      2. 1.6.2 Recovering Performance of Existing Hedge Funds

    7. 1.7 Market Restraints

      1. 1.7.1 Management Faces Fee Pressure from Investors

      2. 1.7.2 Impacts of Global Markets slowdown on Fund Redemptions, Fund Launches and Fund Liquidations

    8. 1.8 Porter's Five Forces Analysis

      1. 1.8.1 Bargaining Power of Suppliers

      2. 1.8.2 Bargaining Power of Buyers/Consumers

      3. 1.8.3 Threat of New Entrants

      4. 1.8.4 Threat of Substitute Products

      5. 1.8.5 Intensity of Competitive Rivalry

    9. 1.9 Impact of COVID-19 on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Core Strategy

      1. 2.1.1 Equity Strategies

      2. 2.1.2 Macro Strategies

      3. 2.1.3 Event Driven Strategies

      4. 2.1.4 Credit Strategies

      5. 2.1.5 Relative Value Strategies

      6. 2.1.6 Niche Strategies

      7. 2.1.7 Multi-Strategy

      8. 2.1.8 Managed Futures/CTA Strategies

    2. 2.2 By Manager Location

      1. 2.2.1 North America

        1. 2.2.1.1 United states

        2. 2.2.1.2 Canada

        3. 2.2.1.3 Mexico

      2. 2.2.2 Europe

        1. 2.2.2.1 United Kingdom

        2. 2.2.2.2 Sweden

        3. 2.2.2.3 France

        4. 2.2.2.4 Switzerland

        5. 2.2.2.5 Rest of Europe

      3. 2.2.3 Asia-Pacific

        1. 2.2.3.1 Hong Kong

        2. 2.2.3.2 Australia

        3. 2.2.3.3 Rest of Asia-Pacific

      4. 2.2.4 Latin America

        1. 2.2.4.1 Brazil

        2. 2.2.4.2 Rest of Latin America

      5. 2.2.5 Middle East and Africa

        1. 2.2.5.1 United Arab Emirates

        2. 2.2.5.2 Saudi Arabia

        3. 2.2.5.3 Rest of Middle East and Africa

Hedge Fund Industry Market Size FAQs

The Hedge Fund Market size is expected to reach USD 4.74 trillion in 2024 and grow at a CAGR of 3.14% to reach USD 5.47 trillion by 2029.

In 2024, the Hedge Fund Market size is expected to reach USD 4.74 trillion.

Hedge Fund Industry Report Snapshots

Global Hedge Fund Industry Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)