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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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  1. Research
    1. AIMA Research
    2. Industry research
    3. Surveys
      1. 2016 Global Hedge Fund Survey with KPMG and the MFA
      2. Liquidity Pulse Check
      3. Private Credit
  2. AIMA Journal
    1. Recent issues
    2. Search AIMA Journal articles
    3. AIMA Journal archive: 2010-2012
  3. '25 Years in Hedge Funds'
    1. Introduction - AIMA's global mantra
    2. How the hedge fund industry has evolved over the last 25 years
    3. How the regulatory landscape has changed for hedge funds
    4. Separating fiction from reality: The most common and persistent hedge fund myths
    5. The next five years - where is the hedge fund industry headed?
    6. Virtual roundtable - Leading figures from the hedge fund industry look ahead to 2020
    7. Learning the lessons from the past
    8. Accessing hedge funds: how ‘solutions’ are the new FoHFs
    9. 'Big data': The growth of the global hedge fund industry
  4. "The Case for Hedge Funds"
    1. Global Hedge Fund Industry Paper: The value of our industry
    2. The Value of the Hedge Fund Industry to Investors, Markets and the Broader Economy: Research commissioned by AIMA and KPMG
    3. The Evolution of an Industry: KPMG/AIMA Global Hedge Fund Survey
    4. Contributing to Communities: A global review of charitable and philanthropic activities by the hedge fund industry
    5. Beyond 60-40: The evolving role of hedge funds in institutional investor portfolios
    6. The Cost of Compliance: Global hedge fund survey by AIMA, MFA and KPMG
    7. Capital Markets and Economic Growth: Long-term trends and policy challenges
    8. Apples and Apples: How to better understand hedge fund performance
    9. The Extra Mile: Partnerships between hedge funds and investors
    10. Key articles by AIMA on the case for hedge funds
  5. AIMA Guides to Sound Practices
  6. AIMA guides for institutional investors
  7. Transparent, Sophisticated, Tax Neutral - The Truth About Offshore Funds
  8. CAIA Association pages
    1. Fundamentals of Alternative Investments
  9. Regulatory Compliance Association pages
    1. About the Regulatory Compliance Association
    2. RCA Curricula and initiatives for alternative investment firms
    3. Meet the regulators and Sr. Fellows
  10. Certified Investment Fund Director programme
  11. Services to Start-up Managers
  12. Glossary
  13. Cyber Security Resources