Among all the regions in the global hedge fund industry, Europe has witnessed the most dramatic changes over the last five years. At the start of the new millennium the total assets under management (AUM) in the industry were only US$39 billion. Over the next seven years this figure increased nearly twelvefold to reach a maximum of US$472.8 billion by October 2007, while the number of funds also crossed the 3,000 mark by this time.
The industry came under tremendous pressure in the 2008 global financial crisis, with total assets declining to US$293.6 billion by March 2009. In the subsequent rebound during 2009 regional managers posted excellent results, gaining 20.26% for the year and attracting some positive net flows. By the end of 2009 the total assets in European hedge funds had reached US$346.5 billion.
Although present European debt issues had came to the fore by mid-2010, the industry has continued to slowly expand with managers attracting assets while also posting healthy gains during the year. Despite the challenges faced by the sector over the last five years, the European hedge fund industry has adapted to the changing investment landscape and as of September 2012 the Eurekahedge European Hedge Fund Index remains in positive territory for the year with gains of 4.48%.
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