It’s official: Hedge fund industry assets are growing again. Maybe.

For many years the best guessing game in the hedge fund business was figuring out exactly how many hedge fund firms were out there in the world, and how much in combined assets under management they held of investors’ money.

For the financial press and others, the best way to do that was to add up the number of funds reporting into the nearly dozen or so various hedge fund databases around the globe, take a stab at figuring out which ones were feeders, which ones were parri-passu “clones” and which ones had, in fact, fallen off the wagon and shuttered, and come up with a rough total.

The game turned a little sour in 2008 for numerous reasons – negative returns, lock-ups, gates and other not-so-nice provisions that few want to dwell on these days. It heated back up last year on anecdotal evidence that institutions, endowments, foundations and high-net-worth individuals were still keen on the asset class, and putting money back in.

Well, no more guessing, at least for the time being: A new study by PerTrac Financial Solutions confirms that after a significant downturn and hiatus, money is flowing back to hedge funds.

PerTrac’s 2009 Hedge Fund Database Study, which parses 10 of the world’s top hedge fund databases, found that total industry assets under management gained 5.5% over the prior year, an increase that puts industry-wide AUM at just over $1.4 trillion. That follows a whopping 36.1% drop in AUM the year before – confirmation that the dam has been stopped up.

But the news wasn’t all positive. The study also found that the number of hedge funds and fund of hedge funds (FoHFs) reporting their monthly figures into various databases declined by 8.6% from a year ago, partly a reflection of some funds simply stopping reporting results, but also a reflection of others being forced to close their doors.

Indeed, a closer look at the numbers suggests that the number of hedge funds and FoHFs out there is declining, while those that are still making a go of it are getting bigger. The charts below taken from the report illustrate the number of new hedge funds and FoHFs through 2008.  (Pertrac notes that “Figures for 2009 fund launches are not considered reliable indicators and are not disclosed here because many newly launched funds do not begin reporting to databases prior to their one year anniversary.”)

There were approximately 7,050 different FoHFs that appeared in this year’s study, of which 6,300 had reported performance numbers in 2009. Of those FoHFs which had reported returns last year, about 10% were domiciled in the US and 90% outside the US.

From that, the study found there is about $580 billion invested into hedge funds through FoHFs, representing a significant 22.7% decline in assets managed through FoHF vehicles from the year before. Further, the number of new hedge fund and FoHF launches, though not disclosed in this year’s study, continued to decline, according to PerTrac.

“New fund launches decreased sharply in 2008, which is no surprise given that year brought the worst market environment in decades,” noted Pertrac Managing Director Meredith Jones. “We are already seeing a reversal of that trend, with a number of new funds launching in 4Q2009 and 1Q2010 as sidelined investment capital and management talent return to the hedge fund industry. It does, however, remain to be seen how long it may be, if ever, before new fund launches reach the levels we saw mid-decade.”

The databases included in the study were Barclay Hedge Fund DataFeeder, Barclay CTA DataFeeder, CASAM CISDM, CogentHedge, Eurekahedge Global Hedge Fund Database, Eurekahedge Global Fund of Funds Database, from Channel Capital Group, Hedge Fund Research, Lipper TASS, and Morningstar Hedge Fund Database.

To be sure, there are many, many grains of salt to digest with the reporting: For starters, Pertrac doesn’t write off a hedge fund until after it has stopped reporting for several months. What’s more, as mentioned earlier, there is a lot of double and even triple counting: hedge funds that run the same strategy in multiple currencies, for instance. noted in its coverage of the report last year that the “surprisingly small” change in hedge fund numbers in 2008 was more the product of anomalies in reporting than actual declines in the number of hedge fund firms.

And there is yet another factor: Some hedge funds have simply stopped reporting to multiple databases, or to any database for that matter, by sheer virtue that there is no obligation to do so. The chart below shows that the vast majority only report to one database, with very close to none reporting to all 10 PerTrac covers.

Nonetheless, the study, released annually since 2003 and the only one of its kind, is a widely-followed indicator of the size and composition of the hedge fund industry. PerTrac, which provides performance analytics software that allows hedge fund firms to connect to all hedge fund databases, is the only company able to see across all sources.

In short, you can guess part of the size of the hedge fund industry some of the time, but you can’t estimate the total size of the hedge fund industry all of the time. At least we know that on aggregate it’s going in the right direction.

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