The FCA collects data from hedge funds and hedge fund managers to inform its supervisory activity, with the aim of ensuring that markets work well and of promoting market integrity. The FCA’s hedge fund survey presents an aggregated picture of hedge fund industry activity in the UK, illustrating key trends and risks.

The FCA has now published its latest hedge fund survey, the highlights of which include:

  • based on the top 100 global alternative investment firms, hedge funds appear to be the third largest type of alternative investments, after real estate and private equity (based on assets under management);
  • equity strategies are the most popular among the funds in the survey, making up 34% of the total number of funds;
  • institutional investors have become the dominant type of investors in hedge fund vehicles, while high net worth individuals have declined as a proportion of hedge fund investors since 2008;
  • data showed that most hedge funds have raised their total gross leverage. Of the total leverage, 98% is obtained using derivatives to gain market exposure, driven by a few large funds;
  • interest rate derivatives make up the largest proportion of the market exposure and portfolio turnover of hedge funds; and
  • in aggregate hedge fund portfolios remain fairly liquid and easily valued.

View Hedge fund survey, 24 March 2014