For example, in Figure 1.1, Van Hedge Fund Advisors International has es-
timated the number of hedge funds worldwide at 8,100. Other estimates
are generally within about 10 percent of this estimate.
The number of hedge funds has risen by about 12.6 percent annually
since 1988.
3
This total represents the new funds created and the funds that
shut down. Hedge fund professionals believe that the average hedge fund
has been in existence for about eight years. The lack of hard data on hedge
fund assets means that this average life is uncertain; but if it is true, each
year many more hedge funds are created and a large number of funds exit.
The same sources that estimate the number of hedge funds also esti-
mate the assets under management (AUM). Figure 1.2 shows the hedge
fund assets estimated by Van Hedge Fund Advisors International each
year-end from 1988 through 2003. The hedge assets are also subject to un-
certainty. However, Tass Research separately estimated the global hedge
fund assets at $750 billion on December 31, 2003.
The assets invested in hedge funds have risen by 21.9 percent annually
since 1988.
4
Figure 1.2 shows that although the growth has been irregular,
the industry has grown every year.
8
HEDGE FUND COURSE
FIGURE 1.1
Estimated Number of Hedge Funds
Source: ©2004 by Van Hedge Fund Advisors International, LLC, and/or its li-
censors, Nashville, TN, USA.