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New Tiburon Research Report - An Initial Overview of the Hedge Funds Industry
Tiburon Strategic Advisors, a market research & strategy consulting firm serving a wide variety of financial institutions and investment managers, is pleased to announce the release of its newly updated research report on Hedge Funds. This research release summarizes some of the report's key findings.
Please click the image above to view the table of contents for Tiburon's An Initial Overview of the Hedge Funds Industry Research Report |
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The purpose of this report is to provide readers with an initial understanding of the hedge funds industry. The hedge funds industry weathered numerous storms in the late 1990s, including the closure of several leading firms such as Tiger Management, Long-Term Capital Management, and Soros. However, all the while, hedge funds continued to grow, and an impressive hedge funds-of-funds business emerged. Subsequently, the market volatility of 2000-2003 pointed many firms in the direction of hedge funds and hedge funds grew even more rapidly. Performance in 2004-2005 then provided a set-back. This report explains the four types of hedge funds, identifies the leading managers of both hedge funds and hedge funds-of-funds, and outlines successful strategies for distribution into the high net worth market. This is Tiburon's fourth draft of this report, with each draft getting more comprehensive.
Tiburon’s first draft of this report was published in 2000 before hedge funds caught the attention of many financial institutions and financial advisors; that version was actually a broad report addressing hedge funds, venture capital & private equity, real estate, & other alternative investments.
Tiburon’s second draft of this report was published in 2007 at which point it was unbundled from Tiburon’s other equally thorough reviews of venture capital & private equity, real estate, and other alternative investments.
Tiburon’s third draft of this report was written in 2008; that draft sought to develop a more clear storyline, establish structure for future drafts, and flesh out details in the appendix of hedge funds companies.
This is Tiburon’s fourth draft of this report. This version sought to tighten the report’s table of contents and build a history chapter.
Key Findings
This report has a long list of interesting facts to share:
Evolution of the Hedge Funds Business
This section provides of synopsis of the key points regarding the evolution of the hedge funds business.
Market History
- The hedge funds business was founded in the 1940s and has evolved through four phases, including its emergence, strategy diversification, high returns, and now today’s risk management phase
Market Definition
- The number of global hedge fund managers is comprised of US hedge fund managers, managed futures fund managers, hedge fund mutual fund managers, and non-US hedge fund managers.
Market Growth
- There are over 7,
000 hedge fund managers, managed futures managers, non-US hedge fund managers, and hedge fund mutual fund managers
- The number of US hedge funds has grown significantly to nearly 10,000, up from just 6,100 funds in 2004
- US hedge funds assets under management have also grown significantly to almost $2 trillion, up more than 200% from 2002
Current Status
- Hedge fund managers are still piling into the market faster than they are falling out, recently 77% of managers launched hedge funds whereas only 23% liquidated
- Hedge funds-of-funds assets under management have grown even faster than those in hedge funds themselves, increasing almost 200%; there were $953 billion assets under management in 2006
- Hedge fund index funds are a low cost alternative to hedge fund-of-funds, but drawbacks include average performance, no track records, and no standards for index building
- There is over $29 billion in hedge fund mutual funds assets under management
Key Issues
- Hedge funds require high minimum investments; common requirements include a $250,000 minimum and $1.5 million net worth
- Hedge funds typically are young and have low assets under management, but hire experienced man
agers
- The largest worldwide hedge fund company is JP Morgan Asset Management, with $33.1 billion assets under management and Goldman Sachs, with less than $1 billion behind the leader
Markets & Distribution Channels
This section provides a synopsis of the key points regarding the markets & distributions channels of the hedge funds business.
Direct Distribution
- Hedge fund assets under management are dominated by investments from high net worth consumer households
Financial Advisor Markets
- Only 10% of the top fifty independent broker/dealers currently offer hedge funds
Institutional Markets
- Endowments & foundations account for $60 billion hedge funds assets under management, up 300% since 1997
International Markets
- Europe has taken the lead in developing guaranteed products & structured notes
Future Predictions for the Hedge Funds Business
This section provides a synopsis regarding the future of the hedge funds business.
Continual Blow Ups But Still Steady Market Growth
- Hedge funds will nearly double to almost $4.5 trillion by 20
13
Retailization of Hedge Fund Products
- Hedge fund-of-funds assets under management will continue to grow at approximately 12% per year, reaching $1.1 trillion assets under management in 2013
- Mutual funds with hedge fund strategies assets under management will account for over 20% of the projected combination of assets
Opportunities in Defined Benefit & Defined Contribution Plans
- The average pension fund allocates 3% of its assets to hedge funds
Increased Regulation
- The hedge fund industry will be increasingly safe and profitable as it develops through consumer education, industry advances, and scrubbed data
- Hedge fund sleuths will emerge to educate investors about hedge funds and due diligence
To better understand the developments in Hedge Funds, executives can purchase Tiburon's An Initial Overview of the Hedge Funds Industry research report where the key findings highlighted above are covered in greater detail. Please contact Sarah Sage at SSage@TiburonAdvisors.Com or 415-789-2540.
More Information
The following links will open specific pages on Tiburon's web site:
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Tiburon Strategic Advisors
Tiburon Strategic Advisors, based in Tiburon, CA, was formed in 1998 to offer market research & strategy consulting services to all types of financial institutions and investment managers:
- The firm has served over 300 corporate clients and completed over 1,100 projects since its founding, and today, its knowledge base includes mutual fund distribution, separately managed account programs, alternative investments, wealth management, insurance products, banking services, the fee-only financial advisor market, the CPA firm market, the family office market, and various international markets.
- Tiburon holds a series of CEO Summits semi-annually for its executive-level clients. The next CEO Summit is scheduled for October 14-15, 2008 (San Francisco, CA) at the Ritz Carlton Hotel in San Francisco, CA. 2009 dates are April 9-10, 2009 (New York, NY), and October 7-8, 2009 (San Francisco, CA). Attendance is by invitation only and attendance at each Summit is limited to 125 senior industry executives. Visit the CEO Summits section of Tiburon's web site for details on current and past CEO Summits, including attendee lists, meeting agendas, and highlights. Please contact Tiburon's Managing Principal Chip Roame at CRoame@TiburonAdvisors.Com or (415) 789-2541 if you are a Tiburon client and have an interest in attending a future Tiburon CEO Summit.
- Tiburon has published forty-two ~300-400+ page research reports, which offer detailed analyses of growing business segments; each is available for $5,000; these reports can be ordered by contacting Sarah Sage at SSage@TiburonAdvisors.Com or (415) 789-2540.
- Tiburon offers an annual research report retainer service, whereby dozens of clients receive all Tiburon reports published within a year for $25,000; clients can subscribe to Tiburon's 2008 Research Report Retainer by contacting Sarah Sage at SSage@TiburonAdvisors.Com or (415) 789-2540.
- Tiburon also offers a database access program, whereby it shares its 300,000+ person industry executives contacts database with dozens of clients for $25,000 per year (distributed quarterly); clients can subscribe to Tiburon's Database Access Program by contacting Sarah Sage at SSage@TiburonAdvisors.Com or (415) 789-2540.
- Tiburon offers thirteen online business benchmarking tools that are available to all types of financial advisors in an effort to help them benchmark their business practices and build more successful businesses. The sites include www.BrokerBestPractice.Com for wirehouse & regional brokers, www.FABestPractices.Com for fee-only financial advisors, www.IndependentRepBestPractices.Com for independent reps, and www.PrivateBankerBestPractices.Com for private bankers. Almost 5,000 advisors have used these tools. By completing one of the online surveys, financial advisors can access a FREE copy of the relevant comprehensive Tiburon research report, which summarizes and analyzes the collective results.
- Tiburon's weekly research releases, like this one, are emailed for free to interested industry executives, media representatives, conference planners, and individual financial advisors. Over 55,000 industry executives now receive these releases. Feel free to sign up to receive future research releases at Tiburon's web site (www.TiburonAdvisors.Com) if this release was passed to you by a colleague and you would like to receive them directly in the future.
- Tiburon plans to expand its workforce in 2008-2009. Specifically, the firm plans to add two-to-three incremental principals (the most senior role at the firm) and several more research managers in 2008-2009.
- Tiburon has built three executive programs (CEOs-in-Residence, Financial Advisor Roundtable, and Consulting Fellows) in an effort to bring the experiences of additional senior level industry executives to Tiburon clients. Feel free to contact any of the members of Tiburon's executive programs directly or ask that they be included in any ongoing Tiburon has built three executive programs (CEOs-in-Residence, Financial Advisor Roundtable, and Consulting Fellows) in an effort to bring the experiences of additional senior level industry executives to Tiburon clients. Feel free to contact any of the members of Tiburon’s executive programs project.
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