Market Trends of Hedge Fund Industry
Investments in Digital Assets is Driving the Market
Digital asset investments are from high-net-worth investors at present. Institutional investors are continuing to show interest, with several large institutional players penetrating the crypto space. According to hedge fund analysis, 21% of hedge funds surveyed invested in digital assets. Along with increased regulatory clarity and sound operational practices, and expected hedge funds to increase their investment in this asset class, 31% of hedge fund managers plan to add cryptocurrency to their portfolios within the next two years.
Recovering Performance, Despite Challenging Market Conditions
The hedge funds industry seems to consolidate over the years, and fund managers worldwide seem to become more defensive in their strategies.
2021 was an excellent year for hedge funds, with industry AUM (assets under management) surging past the USD 4 trillion mark. In 2021, pension funds were anticipated to represent over one-third of the industry's assets under management (AUM). As industry operators garner revenue as an AUM share, increases in demand from this key market tend to boost the industry's performance. Multi-Strategy and Quant Equity hedge funds are once again among the most favorable. Another strategy that saw a dramatic change in sentiment is Generalist Equity. It may be low relative to the other Equity hedge fund strategies, including Sector-Specific, Market Neutral, and Quant Equity.
