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Unpublished Paper
A Survey of Demographics and Performance in the Hedge Fund Industry
Financial Services Forum Publications
  • Arindam Bandopadhyaya, University of Massachusetts Boston
  • James L. Grant, University of Massachusetts Boston
Document Type
Occasional Paper
Publication Date
7-1-2006
Abstract

We investigate hedge fund demographics using data from the Alternative Asset Center (AAC) and then hedge fund performance over the twelve years since inception of the Credit Suisse/Tremont Hedge Fund Indices (HFI, 1994-2005). We find that hedge funds are largely domiciled “offshore” while hedge-fund managers are located primarily in the United States, particularly New York, California, Illinois, Connecticut and Florida. We find that the annualized performance of hedge funds as an “asset class” is about the same as that of U.S. equities (S&P 500). That being said, the real benefit of hedge funds lies in risk management as the volatility of HFI is considerably lower than the stock market. We also find that most hedge-fund “styles” provide solid absolute and risk-adjusted returns and conclude that hedge funds have been a worthwhile investment vehicle for fund indexers and active investors.

Comments

College of Management at University of Massachusetts Boston, Financial Services Forum, Working Paper 1011.

Community Engaged/Serving
No, this is not community-engaged.
Citation Information
Arindam Bandopadhyaya and James L. Grant. "A Survey of Demographics and Performance in the Hedge Fund Industry" (2006)
Available at: http://works.bepress.com/arindam_bandopadhyaya/8/