{"id":8581,"date":"2022-01-26T23:19:22","date_gmt":"2022-01-27T04:19:22","guid":{"rendered":"https:\/\/navesinkinternational.com\/?p=8581"},"modified":"2023-12-20T02:53:20","modified_gmt":"2023-12-20T07:53:20","slug":"the-hidden-11-tn-hedge-fund-industry","status":"publish","type":"post","link":"https:\/\/navesinkinternational.com\/2022\/01\/26\/the-hidden-11-tn-hedge-fund-industry\/","title":{"rendered":"The hidden $11 Tn hedge fund industry"},"content":{"rendered":"

\"Vault-Door\"The SEC will be asking for increased transparency<\/span> from private hedge funds, a discreet $11 Tn segment<\/span> of the hedge fund industry, by increasing the content and timeliness of the forms PF requirements<\/span>.<\/p>\n

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The form PF and the lack of transparency.<\/h3>\n

The form PF (PF stands for “Private Fund”) is a quarterly report filed by typically large foreign funds when they sell into the US. The form was formalized in 2009, after the real estate bubble, giving the SEC 10+ years of exceptional insights on the alternative industry.<\/p>\n

The filling is quarterly and mandatory, with a 60 day delay. These PF reports are not made public<\/span> by the SEC – unlike the forms ADV, also filled by all hedge funds, which are available to the general public on EDGAR<\/a> \/ the SEC website<\/a> \/ Adviserinfo<\/a>.<\/p>\n

Hedge fund privacy is actually an issue for hedge fund industry analysts<\/span>, as researchers can only work with what hedge funds publicly report, instead of how hedge funds truly are. Practically speaking, hedge funds publicly disclose their returns, AUM and terms to half a dozen companies (Eurekahedge, BarclayHedge, HFR, TASS, Preqin, Morningstar…) on a voluntary basis. The coverage universe of these providers are pretty disjoint, meaning that you need access to all of the providers to have a good picture of the industry. And to make it even more impractical, each provider sells its data with its own information structure and classifications, and generally at a high subscription price.<\/p>\n

As a result, obtaining a full picture of the hedge fund universe is costly, difficult, and always partial<\/span>. A side-effect is that only the SEC has better information of the alternative industry as a whole, and much more insights than the general public or even its participants on their own industry.<\/p>\n

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The hidden hedge fund world<\/h3>\n

This being said, there was an interesting research article in 2020 (here<\/a> and below), where the authors have managed to compare the publicly available data to the SEC’s private data<\/span> from PF forms during the 2013-2016 period.\u00a0Here are the main takes of this comparison.<\/p>\n

Industry size<\/h4>\n