Reprinted from Institutional Investor’s Alpha Spring 2016 issue
The growth of the hedge fund industry over the past decade has been tremendous, with more and more institutional and retail investors allocating capital to investment strategies that fall outside the boundaries of traditional stock and bond funds.
The hedge fund industry, which has gone from managing approximately $240 billion in 2000 to $3.2 trillion at the end of 2015, has grown by 19 percent annually, on average. It is only natural to question whether there is sufficient capacity for this amount of capital to be absorbed and productively invested in these alternative-investment strategies.
One way to measure capacity is to look at the amount of alpha hedge funds are producing. In this commentary written for Institutional Investor’s Alpha magazine, Commonfund’s Chief Investment Officer, Mark Anson and Director of Trading, Ryan Driscoll reveal their findings and what it means for hedge fund investors.