Monday, May 08, 2017

SEC releases quarterly stats on private funds

By Amanda Maine, J.D.

The SEC published a report detailing data and analyses of private fund statistics and trends from the third quarter of 2016. The 54-page report, which has been released quarterly since October 2015, aggregates data reported by private fund advisers on Form ADV and Form PF.

Forms PF and ADV. Form PF is required to be filed by SEC-registered investment advisers with at least $150 million in private fund assets. Large hedge fund advisers with at least $1.5 billion in hedge fund assets under management must file Form PF quarterly, while small private fund advisers and private equity advisers file Form PF on an annual basis. Registered investment advisers with less than $150 million in private fund assets report general private fund data on Form ADV.

Latest report. The most recent report reflects data from the fourth quarter of 2014 through the third quarter of 2016. According to the report, private equity funds were the most numerous type of fund, totaling over 9,700, with hedge funds coming in second with 8,947 funds. The number of advisers advising hedge funds was 1,676, and the number advising private equity funds was 1,015. At the end of 2016’s third quarter, the total number of funds, including private equity funds, hedge funds, real estate funds, securitized asset funds, and liquidity funds, totaled 27,020, with 2,816 advisers advising all funds examined in the report.

The aggregate private fund net asset value (NAV) was $3.4 billion for hedge funds and $1.9 billion for private equity funds. The U.S. was the number one domicile for all private funds at 50.8 percent, while the Cayman Islands was the second most popular domicile at 37.2 percent. The Cayman Islands was the top domicile for large hedge funds at 53.8 percent. Nearly 34 percent of large hedge funds were domiciled in the U.S. The U.S. was also the top domicile for private equity funds at 62.3 percent, with the Cayman Islands in second at 30 percent. All other domiciles represented less than 6 percent of the total funds’ domiciles, according to the report.

The report also contained information on beneficial ownership as a percentage of private funds’ aggregate NAV, including 18.7 percent in private funds, 13.2 percent in state or municipal pension plans, 12.8 percent in other pension plans, and 10.2 percent in non-profits.

Regarding hedge fund industry concentration, as a percentage of aggregate NAV, the top 10 hedge funds represented 7.9 percent, with the top 25 and 50 hedge funds representing 13.8 percent and 20.6 percent, respectively. The top 500 hedge funds represented 57.7 percent aggregate NAV of the hedge fund industry.

According to the report, 5.8 percent of gross assets in private equity funds advised by a large fund adviser were in the oil and gas extraction industry, followed by software publishers (4.7 percent), electric power (3.7 percent), telecommunications data processing services (2.6 percent), and pipeline transportation (2.2 percent).