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Global Hedge Fund Industry Paper: The value of our industry

Discusses the global hedge fund industry’s value to investors, financial markets and the broader society

 

In our 2011 paper on the global hedge fund industry, we highlighted the fact that hedge funds increasingly have been performing an important social role by managing investments for pension funds, university endowments, charitable foundations and other socially important institutional investors. We included our estimate that there are 300,000 people employed directly or indirectly by the hedge fund industry globally – the first such statistic of its kind produced – including 240,000 in North America, 50,000 in Europe and 10,000 in Asia-Pacific. The totals include both those employed directly within the hedge fund sector and those jobs generated by the industry among service providers like administrators, lawyers and accountants.

The ratio of direct jobs to indirect jobs was found to be generally 1:2, so the number of direct jobs within the industry globally is 100,000 with a further 200,000 indirect jobs generated by the industry. We said those employees make substantial contributions to the public purse each year; in Europe alone, the annual tax contribution by the industry was found to be more than €4 billion in a survey of AIMA members by Open Europe in 2009. We also stressed the financial stability benefits that hedge funds provide to financial markets.

Additionally, the paper set out to debunk a number of popular myths about the industry, such as that short selling serves no useful broader purpose, or that the industry is “unregulated”, takes excessive risks and is “secretive”.

 

Figure 2

AIMA Newsletter Global hedge fund industry   

“The hedge fund industry has a major social role as a result of increased institutional investment from such organisations as public and private sector pension funds, insurers, university endowments and charities. Approximately two-thirds of total hedge fund assets under management come from such institutions.”

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