Signs that the hedge-fund industry is growing more slowly
In truth, any attempt to analyse the hedge-fund industry as a whole runs into the problem that it is not an asset class but a style of fund management.
Now hedge funds are trying to market themselves to pension funds and endowments. What those clients want is a controlled balance between risk and reward, and a return that is not correlated with conventional stockmarkets.
That helps explain two trends in the industry. The first is concentration: the assets of the 100 largest funds rose from 47% of the industry in 2002 to 66% in 2007, according to GAM, an asset manager.
The second is a reliance on funds-of-funds.
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