The hedge fund industry as a whole is dominated by the US markets with over two thirds of hedge fund assets under management, or AUM being invested in North America as at the end of 2021. This compares to around 50% of traditional mutual fund assets under management being invested in the US, demonstrating the greater depth of equity markets in the US, allowing for more esoteric investment strategies. In terms of hedge fund strategies, there are a wide range of strategies utilized and in practice some strategies are difficult to classify. However, the strategy which has the biggest market share is long short equity where the fund manager can hold both long positions in equities that they think will increase in value and short positions in those they think will decrease in value.

The goal of many hedge funds is to drive AUM growth to achieve higher returns to scale. This is because the costs of managing hedge funds do not increase in line with the increase in fees earned from the fund As AUM increases, meaning relatively higher profits can be made by bigger funds. However, some hedge fund managers may choose to stay relatively small and place a limit on investments into their funds, where the number of attractive investments for their chosen strategy is limited.

The aim here is to maintain high returns for investors. The amount of money invested through smaller hedge funds, those less than 100 million dollars in size accounted for 57% of the market at the end of 2021.

Finally, in terms of the location of hedge fund management companies, almost three quarters of hedge fund head offices are in the US or UK, with the US alone accounting for 56%. Now let's have a look at the global hedge fund industry performance data. At a high level, this graph shows that hedge fund performance as an asset class is variable with the opportunity for high gains as well as significant losses. Nonetheless, in the period from 2004 to 2021, returns have been good except for the 2008 financial crisis. Note that these returns seem pretty healthy, but they have not been adjusted for the risk taken by the fund. Hedge funds may have taken significantly more risk than traditional mutual funds to achieve these returns. Furthermore, if we were to drill down into this data to the fund level, there would be significant variability of performance between different hedge funds, adopting different strategies across equity, fixed income, and alternative asset classes, as well as material levels of complete fund failure.