Private pension funds outranking public funds now
The number of investors allocating at least U$1 billion to hedge funds has grown to 247 as of May 2018.
And new data reveals that it is private pension funds that are leading the big-money hedge fund investors, overtaking public pension funds.
Collectively, the Billion Dollar Club allocates $889bn to the asset class, an 11% increase from the $802bn in allocations recorded in April 2017. This represents 25% of total hedge fund AUM.
“While small in number, the Billion Dollar Club of the largest institutional investors in hedge funds exerts huge influence on the industry,” explains Amy Bensted, Head of Hedge Fund Products at industry analysts Preqin.
“The 247 members of the Club invest one out of every four dollars in the asset class, and cumulatively represent nearly $900bn in total invested capital. This is up by more than 10% in the past year, even as the average allocation has fallen, demonstrating the size of these investors,” adds Bensted.
Where’s the money from?
By region, Europe accounts for the greatest number of entrants into the Club (18) over the past 12 months, while North America saw the greatest number of investors which exited the Club (27).
Although sovereign wealth funds account for just 3% of all investors in the Billion Dollar Club, they represent 16% ($146bn) of aggregate capital invested by the Club.
Higher turnover of members
Bensted says that there has been an increase in turnover among the Billion Dollar Club investors over the past 12 months.
“The total number of Club members grew by five, but 42 institutions left their ranks, up from 28 in the previous 12 months. In fact, more Billion Dollar Club members have reduced their allocations over the past year than have increased them. Despite this, they remain extremely influential investors, and are likely to drive sentiment in the asset class in the months ahead,” she says.
