9 December 2007
 Last week’s estimate of the size of the hedge fund industry is so, well, last week. As we discussed on Monday, recent estimates range from $1.25 trillion to $1.74 trillion, to $2.48 trillion, to $2.68 trillion. Now the magazine HFM Week (not to be confused with FHM, the men’s magazine), just released a survey of administrators that pegged the global hedge fund industry at, drum roll please, $4 trillion. Or, as Mike Myers’ Doctor Evil would say, “Four…..TRILLION….dollars!”.
If all of that money was the GDP of a country, it would be about the fifth largest economy in the world. But even when you look at the actual size of the outputs of the hedge fund industry (a number more comparable to the annual GDP of a country), the hedge fund industry would still be in the top 30 - somewhere around Saudi Arabia and Belgium (assuming a 10% return, or $400 billion of annual “GDP”).
Overall world GDP is about $66 trillion. In fairness, surveys of hedge fund administrators have always yielded higher numbers. But given the recent pace of inflation in hedge fund industry size estimates, it should only be a few more years before the planet is re-named “Earth Capital Partners II LP” and begins a proxy fight to take over Mars and Venus (apparently, there is untapped value in Venus, you know).
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