On average, big hedge funds have outperformed their smaller rivals since the recession, according to a new study ”“ a significant figure in that small hedge funds have otherwise fared better in 13 of the past 16 years.
New York City-based PerTrac published the findings, without singling out the performance of specific hedge funds in New York, Fairfield County or elsewhere.
Large funds’ performance dipped 2.63 percent on average in 2011, PerTrac found, compared to 2.78 percent for small funds and 2.95 percent for mid-sized ones. Large hedge funds also had lower volatility relative to smaller funds.
For the purposes of PerTrac’s data, large hedge funds are those with more than $500 million in assets under management, with small hedge funds those with less than $100 million.
PerTrac also examined the impact of a fund’s age on performance. Since 1996, the average “young” fund ”“ those operating less than two years ”“ produced a cumulative return of more than 825 percent, compared to about 450 percent for mid-age funds and 350 percent for “tenured” funds in existence four years or older.
“The findings suggest that investors interested in exposure to hedge funds and seeking to protect their wealth should examine funds with over $500 million in (assets), since the average large fund has had lower losses in negative performance years and lower annualized deviation figures compared to the average small fund,” said Jed Alpert, managing director of global marketing for PerTrac, in a prepared statement.
