This report by KPMG and the Alternative Investment Management Association (AIMA) is based on surveys and structured interviews conducted between October 2011 and February 2012 with 150 hedge fund managers from around the globe. The topics included the continuing institutionalization of the business, the changing face of hedge fund operations, the growing emphasis on transparency and due diligence, the ongoing regulatory challenges, and the future of the industry.
In the years before the global financial crisis, the global hedge fund industry experienced dynamic growth, reaching US$2 trillion in assets under management (AUM) in 2008. That period of growth was marked by increased institutional investment as pension funds and university endowments were attracted by uncorrelated returns and low volatility. However, high net worth individuals, traditionally the main investors in hedge funds, were still the leading investors in the industry.