Preqin Hedge Fund Online tracks 701 hedge fund managers that have over $1bn in assets under management (AUM) as at May 2017. These managers are part of the $1bn Club, a group that collectively manages $2.8tn in assets. Here, we break down the members of the $1bn Club by the size of their AUM, and look how the constituents have changed over the past year.
Fund managers with between $1bn and $4.9bn in AUM represent the largest proportion of the $1bn Club, totalling 514 managers with an aggregate $922bn in AUM. The $1bn Club report from the May 2017 issue of Preqin’s Hedge Fund Spotlight noted 117 new entrants and 90 dropouts in this bracket, equating to 17% of members dropping out. This highlights the difficult fundraising environment of the past 12 months, underlined further by only 3% of managers moving up a bracket in the past year. One of these managers is Brazil-based SPX Capital which saw assets grow through 2016 to total $5.7bn as at March 2017 – SPX Capital is consequently one of only two managers outside North America, Europe and Asia-Pacific with over $5bn, the other being Verde Asset Management ($9.9bn as at March 2017).
Managers in this size bracket are the smallest in terms of aggregate AUM, representing $561bn of the total assets of the $1bn Club. It is the least stable bracket, with just 68% of its members remaining in the same group from 2016 to 2017. Nearly a fifth of its managers have moved down a bracket in the past year, including three that saw high-profile closures: Eton Park Capital Management, Perry Capital and Visium Asset Management. Meanwhile, 13% of managers within the group have managed to raise assets over $10bn as at May 2017 – HBK Capital Management is one such manager, with AUM increasing from $9.4bn to $10.1bn between December 2015 and December 2016.
With a combined AUM of $692bn, this bracket has been relatively stable over the past year, with over three-quarters of its members remaining in the group, and one in 20 managers making the jump into the elite group of managers with $20bn or more in AUM. Farallon Capital Management’s AUM increased by $3bn over the past year, eclipsing $22bn as at December 2016 with $18.9bn as at December 2015. At the other end of the spectrum, 18% of managers have not been able to maintain their assets above the $10bn boundary, consequently moving down to the $5-9.9bn bracket.
$20bn or More
Since Preqin’s previous $1bn Club study in May 2016, the number of managers with $20bn or more in AUM has declined by two to total 21. Fourteen percent of managers dropped out of the group – Brevan Howard Capital Management and York Capital Management notably among them. The majority (81%) of managers in this group have seen an increase in AUM despite the net decrease in members, and the aggregate assets controlled by managers in this bracket has increased by $2bn over the past year, amounting to $674bn (as at December 2016).
For more in-depth analysis on the $1bn Club of hedge fund managers and also of hedge fund investors, please see the full May 2017 issue of Preqin’s Hedge Fund Spotlight.