London
Hedge Funds Reach Over $220 Billion in 2005, a Fifth of Global
Total
Mar 20, 2006 - Hedge fund assets managed out of London grew
18% in 2005 to $225bn making London one of the fastest growing
hedge fund centres according to the 2006 edition of IFSL's
Hedge Funds report.
Growth in assets in 2005 was however lower than in previous
years mirroring a global trend (see table below). Although
New York remains the leading hedge fund centre, London's share
of global assets doubled to 20% between 2002 and 2005 as growth
in Europe outpaced growth in the US. This was largely a result
of an increase in investment from European institutional investors
such as pension funds and insurance companies during this
period.
London is by far the largest centre for European hedge fund
managers. The 700 hedge funds located in London accounted
for three-quarters of European based hedge fund assets at
end-2005. If figures for fund of funds and US hedge funds
with a trading desk in Europe are taken into account, London's
share was more than 90%. Other locations for hedge fund managers
in Europe include France, Spain, Sweden and Switzerland.
Factors underpinning London's strong position include its
local expertise, the proximity of clients and markets, a strong
asset management industry and a favourable regulatory environment.
London is also a leading centre for hedge fund services notably
prime brokerage services offered by the leading London based
investment banks. More than 90% of European prime brokerage
activity is conducted through London.
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