The US Hedge Fund Market size in terms of assets under management value is expected to grow from USD 2.77 trillion in 2024 to USD 3.80 trillion by 2029, at a CAGR of 6.52% during the forecast period (2024-2029).
The United States hedge fund market is one of the largest and most influential in the world. A hedge fund is a collective investment fund invested in securities or another type of investment to get returns. Hedge funds can use complex trading, portfolio construction, and risk management techniques to improve returns. The United States accounts for three-quarters of this industry's assets under management (AuM) worldwide.
Fund managers also use AIML (artificial intelligence and machine learning) more to increase returns and improve the efficiency of their operations. Several people with strong investment backgrounds are drawn to joining "plug and play" operations because they can concentrate on producing alpha instead of managing the risk and expense of starting their hedge fund, especially with the barriers to entry at an all-time high due to evolving regulatory requirements and complex operational requirements.
Hedge funds are leaning more toward digital assets and the cryptocurrency sector. Hedge fund managers are analyzing crypto as a strong opportunity for growth. Their emerging interest is one of the reasons cryptocurrency values are rapidly growing. Globally, there are over three hundred crypto hedge funds. The total AUM of US crypto hedge funds roughly doubled over the past few years.
The emergence and popularity of digital assets have created new investment opportunities for hedge funds. Cryptocurrencies, blockchain technology, and related assets have offered the potential for high returns, diversification, and uncorrelated assets to traditional markets. The increased acceptance of digital assets by mainstream financial institutions and corporations has bolstered the interest of hedge funds. Major institutions, such as banks, asset managers, and insurance companies, have started offering or supporting cryptocurrency-related products and services. The rise in digital asset investing has necessitated the development of supporting technology and infrastructure. Hedge funds have been actively involved in developing trading platforms, custody solutions, and other infrastructure required for managing digital assets. This has created new business opportunities and revenue streams for hedge fund managers and service providers.
The US hedge fund market is moderately fragmented. The report includes an overview of hedge fund companies operating across the US. The report includes an overview of the largest hedge funds by assets managed and major digital asset hedge funds. The US hedge fund industry presents opportunities for growth during the forecast period, which is expected to drive market competition further. Some of the prominent players include Bridgewater Associates, Renaissance Technologies LLC, AQR Capital Management, Two Sigma, and Millennium Management.
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