UK Hedge Funds Market Insights Forecasts to 2033

• The Market is growing at a CAGR of 8.9% from 2023 to 2033
• The UK Hedge Funds Market Size is Expected to hold a significant share by 2033.

The UK Hedge Funds Market is expected to hold a significant share by 2033, growing at a CAGR of 8.9% from 2023 to 2033.

Market Overview

Hedge funds are investment funds that collect money from institutional or authorized investors and use a variety of techniques to generate profits for their supporters. Hedge funds are more adaptable in their investment strategy than typical investment funds, giving them the ability to employ a variety of financial tools and strategies, like leverage, short selling, and derivatives trading. Hedge funds aim to provide positive returns independent of the overall direction of the financial markets, and they frequently focus on absolute returns as opposed to relative performance about a benchmark. Usually, teams of qualified investment managers manage these funds to increase returns for investors while minimizing risk. The flexibility of hedge funds' investing strategy enables them to make bets on a wide range of assets, including derivatives, stocks, bonds, currencies, and commodities. Hedge funds play an important role in offering fluidity for mispriced assets, especially when large sizes are traded in tinny markets thus reducing market instability. This is especially important given the fast growth in the capacity of new-generation structured products delivered by investment banks.   

Report Coverage

This research report categorizes the market for the UK hedge funds market based on various segments and regions forecasts revenue growth and analyzes trends in each submarket. The report analyses the key growth drivers, opportunities, and challenges influencing the UK hedge funds market. Recent market developments and competitive strategies such as expansion, product launch, and development, partnership, merger, and acquisition have been included to draw the competitive landscape in the market. The report strategically identifies and profiles the key market players and analyses their core competencies in each sub-segment of the UK hedge funds market.

Driving Factors

Diversification beyond conventional asset classes like equities and bonds is a strategy that investors are increasingly pursuing. Hedge funds present attractive alternatives because of their wide range of strategies and emphasis on uncorrelated returns. In addition, institutional investors and high-net-worth individuals are evolving and looking to hedge funds for their specialized strategies and tailored solutions. These factors propel the expansion of the market. Furthermore, the increasing advancement in technologies drives the growth of the market. Moreover, regulations play an important role in determining the hedge fund space. Increased surveillance by regulators has been present in recent years to improve transparency, protect investors, and address apparent systemic concerns. These factors drive the growth of the hedge fund market.

Restraining Factors

High costs charged by hedge funds have come under rising inspection, especially during periods of deficit. To justify high fees, investors require greater returns, particularly when compared to low-cost passive alternatives. Furthermore, increasing scrutiny analysis and compliance charges are required by regulators. These factors hinder the growth of the hedge funds market.    

Market Segmentation

The UK hedge funds market share is classified into strategy and type.

• The long/short equity segment is expected to hold the largest market share through the forecast period.

The UK hedge funds market is segmented by strategy into long/short equity, event driven, global macro, and multi-strategy. Among these, the long/short equity segment is expected to hold the largest market share through the forecast period. Long/short equity approaches involve taking both long positions in underrated securities anticipated to rise and short positions in overrated securities expected to decay. The expansion of the long/short equity type can also be ascribed to rising investor demand for alpha and active management, particularly during periods of market volatility.  

• The offshore segment dominates the market with the largest market share over the predicted period.  

The UK hedge funds market is segmented by type into offshore, fund of funds, and domestic. Among these, the offshore segment dominates the market with the largest market share over the predicted period. Offshore hedge funds are classically recognized in jurisdictions that provide favorable regulatory environments, tax benefits, and legal bases, making them attractive for fund managers in search of operational flexibility and tax efficacy. The legal systems in these countries are known for offering a certain degree of privacy and confidentiality, which draws in high-net-worth individuals and institutional investors who seek security for their financial data.  

Competitive Analysis:

The report offers the appropriate analysis of the key organizations/companies involved within the UK hedge funds market along with a comparative evaluation primarily based on their product offering, business overviews, geographic presence, enterprise strategies, segment market share, and SWOT analysis. The report also provides an elaborative analysis focusing on the current news and developments of the companies, which includes product development, innovations, joint ventures, partnerships, mergers & acquisitions, strategic alliances, and others. This allows for the evaluation of the overall competition within the market.

List of Key Companies

• Capula Investment Management LLP
• CQS
• Brevan Howard Asset Management
• Lansdowne Partners
• LMR Partners
• Man Group
• Fusion Asset Management
• Arrowgrass Capital Partners
• BlueCrest Capital Management
• Others

Key Target Audience

• Market Players
• Investors
• End-users
• Government Authorities 
• Consulting And Research Firm
• Venture capitalists
• Value-Added Resellers (VARs)

Recent Developments

• In August 2023, the UK-based equities investing boutique CRUX Asset Management has been fully acquired by Lansdowne Partners. On August 14, 2023, the deal concluded and Lansdowne became the only owner of CRUX.

Market Segment

This study forecasts revenue at UK, regional, and country levels from 2020 to 2033. Spherical Insights has segmented the UK hedge funds market based on the below-mentioned segments:

UK Hedge Funds Market, By Strategy

• Long/Short Equity
• Event Driven
• Global Macro
• Multi-Strategy

UK Hedge Funds Market, By Type

• Offshore
• Fund of Funds
• Domestic