What % of Hedge Funds/Institutions actually make money?

Discussion in 'Professional Trading' started by iamnewuser911, Nov 25, 2017.

  1. What % beat the S&P?

    How many actually make money every year?

    What's the lifespan of an average hedge fund?

    How many actually survive/succeed?
  2. Good question. I would also like to know what is the percentage of hedge funds who beat the passive benchmark index? If they can't beat the index, it is a waste of money to hire these expensive managers when there are cheaper alternative passive index ETFs.
  3. Handle123


  4. Means most of hedge funds are not doing well aren't they? ... I always thought most hedge funds made money since they were "Professional"
  5. sle


    • What % beat the S&P?
    Of all funds, probably 10-12% at most. Smaller funds do it more frequently, larger ones less so.

    • How many actually make money every year?
    Plenty. Most multi-manager shops have no losing years and rarely have down months.

    • What's the lifespan of an average hedge fund?
    Hard to tell. Most startup funds fold after 2-3 years. If they reach “critical AUM”, they usually stick around.

    • How many actually survive/succeed?
    Very few. Out of roughly 3 trillions of AUM in the hedge fund industry across about 3k registered funds, over 30% is managed by about a 100 shops.
    Last edited: Nov 25, 2017
    light12, Sprout and helpme_please like this.
  6. What does this mean? Over 30% of the 3k registered funds are managed by 100 shops? Meaning these 100 shops own an average of 30 funds each?
  7. sle


    Managing a fund is mostly about retaining the AUM - some do it by making money, some spin it as “un-correlated bet” etc. Making good returns on a large asset base is pretty hard, especially with good risk metrics. Because of that, most managers resort to various spins, “we are the tail hedge”, “we are diversified” etc.
    iprome likes this.
  8. sle


    No, simply that top 100 funds out of 3 thousand manage about a trillion of the total of 3 trillion. It’s a winner take all industry
    lovethetrade likes this.
  9. Does this percentage of beating S&P500 include the 2-and-20 fees or before?

    SPY ETF annual fees is only 0.09%. If the hedge funds are able to beat SPY despite their much higher cost, it will be interesting to know who they are. I would like to follow these skillful hedge fund managers.
  10. Wow, meaning it's kind of like the retail trader industry, few make big $$$. The rest make little to no money I assume?
    #10     Nov 25, 2017