Hedge funds made investors US$1.5tr in 10 years, AIMA Says

Hedge funds have made about US$1.5 trillion for investors after management fees in the past 10 years, according to an industry lobby group seeking to counter criticism over performance and costs.

Those cumulative gains came "despite the performance losses of US$306 billion in 2008, by far the industry's worst year", the Alternative Investment Management Association said in a paper aimed at encouraging pension-fund trustees to invest, citing data from Hedge Fund Research.

Recent critics of the industry included billionaire George Soros as well as the California Public Employees' Retirement System, the largest US pension, which cited cost and complexity when it announced it would pull US$4 billion from hedge funds last year.

"Many trustees are asking questions about their existing or prospective hedge fund allocations," AIMA chief executive Jack Inglis said in a statement.

"Rarely has there been such demand for a realistic assessment of the benefits and also the risks associated with hedge-fund investing."

Hedge Fund Research calculated the returns based on the yearly change in assets under management using all of the funds that contribute to its database, across all strategies, after fees had been deducted.