SEC Begins Publishing Statistics on Hedge Funds and Private Equity Advisors

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The SEC published a report that provides private fund industry statistics and trends, reflecting aggregated data reported by private fund advisers on Form ADV and Form PF.  Most of the data in the more than 50 separate tables and figures is being made public for the first time.  The private fund industry includes hedge funds and private equity groups.

The report includes statistics about the distribution of borrowings, an analysis of hedge fund gross notional exposure to net asset value, and a comparison of average hedge fund investor and hedge fund portfolio liquidity.

SEC Chair Mary Jo White said “While this is highly aggregated data, the statistics illustrate trends and practices in the industry.  Consider just a few examples.  First, although the total notional value of derivatives reported on Form PF has increased, from about $13.6 trillion to about $14.8 trillion, that value has decreased relative to total net assets from the beginning of 2013 to the end of 2014, from about 256% of net asset value to about 221% of net asset value.  Second, more than half of all large hedge fund advisers report aggregate economic leverage less than two and a half times their total reported hedge fund net assets.  And finally, the data indicates that fewer than 100 reporting hedge funds–representing less than $70 billion in combined net assets–manage some portion of their funds using high-frequency trading strategies.”

According to the SEC Chair “The public availability of aggregated information should help to address persistent questions, and to some degree misconceptions, about the practices and size of the private fund industry.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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