Participants in the Australian Hedge Fund Industry

The Australian hedge fund industry is young, but growing quickly. There are a number of hedge fund managers delivering single and multi-strategy products as well as aggregators offering fund of fund products. However, the available information on the make-up of the participants is sketchy.

The attached table examines the membership of the Australian Chapter of AIMA and dissects members according to some key criteria.

There are in excess of 1,000 members of AIMA globally and 61 (6%) members in the Australian Chapter. This is higher than Australia's weight in global sharemarkets for example. While there will be hedge fund managers who are not members of
AIMA, using this membership as a proxy for the industry as a whole in Australia shows some interesting results.

The first split shown is between fund managers (74%) and service providers (26%) such as lawyers, custodians, brokers and exchanges. Of the fund managers, 78% had their primary domicile in Australia and the balance overseas. Among the Australian domiciled managers, 83% were special purpose hedge fund managers and the others part of a diversified financial services business. Finally, 80% of hedge fund managers manufactured funds while the balance aggregated fund of funds.

In summary, of the 61 members of the AIMA's Australian Chapter, 23 (38%) are hedge fund manufacturers. These managers provide product for Australian retail and institutional investors, and in some cases overseas investors by way of special purpose vehicles or mandates.