The United Kingdom Hedge Funds Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The UK Hedge Funds Market is poised to grow at a CAGR of more than 8% during the forecast period.

Hedge funds are investment companies that make an alternative investment option and perform trades from pooled investment funds. Hedge funds find their success in utilizing focusing on risk management, complex trading techniques, and leveraging short selling.

Hedge funds play a crucial role in providing liquidity for mispriced assets, particularly when large volumes are traded in thin markets thereby reducing market volatility. This is particularly important given the rapid growth in the volume of new-generation structured products issued by investment banks

Covid-19 has dramatically altered the financial and emotional landscape for many people in the UK. Covid 19 pandemic hit at the start of 2020 some hedge funds sought to make gains because of the stock market collapse. Mainly the airline sector, which suffered particularly very badly and became a target for short sellers. Hedge funds that were well-positioned in anticipation of the market shock made significant profits during this period. however, the sector suffered as many investors pulled billions out of hedge funds amid economic uncertainty as well as market volatility

UK Hedge Funds Market Trends

Assets Managed in the UK by Client Type

The UK assets management industry primarily provides products and services for clients who broadly fall into either the retail or institutional category, while a small number of IA member firms also operate directly in the private client market. In 2021, assets managed on behalf of institutional clients continued to make up the majority (77%) of assets, while just over a fifth (22%) was managed on behalf of retail clients. Pension clients are the single largest client group in the institutional market and account for 40% of the total assets under management. Among the rest of the institutional client market, insurance clients represent the second largest group, representing 11% of AUM.

Trends in Asset Allocation

The proportion of Investment Association members invested across different asset classes. Observe that almost one-third (29%) of respondents are invested across all five categories listed in the graph. Almost all (93%) of the respondents to the Survey are invested in equities and the majority (78%) are also invested in fixed income. One quarter (25%) of respondents are either equity or fixed-income specialists, investing only in one of these asset classes. Property and cash remain niche areas of investment.

UK Hedge Funds Market Competitor Analysis

The report includes an overview of not only the largest hedge funds by assets managed but also major digital asset hedge funds. In AUM terms, the largest player in the industry is Capula Investment Management LLP, with an AUM of 100 billion USD. Man Group and Brevan Howard, with USD 64 billion and USD 58 billion in AUM respectively, ranked second and third among the top UK hedge funds. The four largest hedge funds are all based in Landon. Currently, some of the major players dominating the market studied are presented here.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support