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2013 Business Expense Benchmark Survey
calibrated to the above AUM thresholds by taking a
ratio of the actual AUM for each band relative to the
“standard” AUM levels listed above. For example,
the average AUM for those respondents whose AUM
was nearest to $10 billion was $9,946,221,786. The
ratio of $10 billion to $9.95 billion is 1.005. So, each
expense response was then multiplied by 1.005 to
derive a “standardized” benchmark at the $10 billion
AUM level. This method allows for easier comparison
across various benchmarks (e.g. region vs. strategy)
given the fixed AUM level. This also allows for an
easier customization of benchmarks, such that we can
tailor a benchmark based to a client’s actual AUM.
Respondent Profile
In this year’s survey, Citi Prime Finance collected
information from across a broad spectrum of
strategies, vintages and assets under management.
In order to better understand thematic changes
across the industry and utilize Citi Prime’s deep,
historical dataset from our successful 2012 survey, we
decided to incorporate 2013 and 2012 responses into
a master dataset. In total, this integrated dataset
accounts for $465.4 Billion or 18.5% of total industry
assets and 124 unique firms from across the globe.
In looking at the regional base for these firms, our
correspondents are based across the following:
62% in the Americas, 36% in EMEA and 2% in APAC.
As in previous years, we adopted the Hedge Fund
Research (HFR) strategy classifications to evaluate
the investment approach of survey respondents.
We have further separated hedge funds as pursuing
equity hedge strategies, event driven, CTA/macro
and fixed income/relative value. The predominant
share (43%) of those answering the survey would
be considered part of the equity hedge group and
the remaining respondents are spread fairly evenly
across the following strategies: 21% Event Driven, 19%
Macro / CTA and 17% Fixed Income Relative Value.
Our foremost approach to analyzing respondent
data was to group according to AUM bands which
correspond to important growth and inflection
points in a firm’s evolution. As we mapped the depth
of our respondents to these points we created the
following AUM bands: $100 million, $500 million,
$1.5 billion, $5 billion, $10 billion and >$10 billion.
Our respondents were group into these AUM
thresholds in the following manner: 36% in
$100million, 17% $500 million, 22% $1.5 billion,
13% $5.0 billion, 6% $10 billion and 6% in >$10 billion.
In looking at the vintage of firms in our database,
we have a balanced pool of respondents. Hedge
fund firms that were started before 2002 comprise
38% of the total set, those launching between
2002-2008 represent 33% and those launching after
2008 makeup 29%. We believe these time periods
represent critical junctures in the industry – a rapid
industry growth phase, a pre liquidity crisis phase
which saw the rise of institutional investment into
hedge funds and a post crisis, maturation phase which
industry participants are still experiencing.
If you are a recipient of this report and have
questions regarding our approach and methodology
or would like to be considered for a more customized
review of the data, please feel free to reach out
to your Citi sales contact or to us directly at
prime.advisory@citi.com
Chart 1: Profile of Survey Respondents
$100M
$500M
$1.5B
$5B
$10B
>$10B
SIZE
AUM: $465.4 BILLION
NUMBER OF FIRMS: 124
18%
1%
55%
15%
9%
2%
6%
6%
23%
36%
17%
13%
Chart 2: Profile of Survey Respondents