As we look back at the untamed securities markets that defined 2008, we naturally have to ask ourselves which asset classes performed the least poorly. To do this, we use the software platform on AlternativeSoft, which enables us to run statistics on individual funds, as well as on a group of hedge funds. Using 窶連sset Search窶兪function, we divided the assets under management (AuM) of the hedge fund universe into four buckets of different sizes1 as shown in Table 1 below.
Table 1: The Universe of Hedge Funds Broken down by Size
| Size | AuM | Total Number of Funds |
|---|---|---|
| Small | US$10-100m (average US$37m) | 4,654 |
| Mid-sized | US$101-500m (average US$232m) | 2,004 |
| Large | >US$500m (average US$693m) | 787 |
| Super-large | 10 largest hedge funds (average US$7,721m) | 10 |
In the following sections, we first summarise our findings of how hedge funds with different sizes of AuM performed. Second, we dig a little deeper and explain our findings on the performance between four hedge fund strategies.
Did Larger Hedge Funds Outperform Smaller Ones from January to October 2008?
Much media talk, and indeed a meaningful part of hedge fund allocations, have in recent years focused on large hedge funds. But how did large funds perform in 2008 as compared to their smaller peers? Does size matter during a 窶藁arket crash窶凰
In our analysis, the 窶牢uper-large窶兪bucket outperformed the other three AuM buckets by an average of 250bps, from January to October 2008. To position this in perspective, on an annualised 3-year basis, the ten largest funds outperformed small, medium and large funds by 650bps, 500bps and 400bps respectively.ﾂ
