Canada the world's fifth largest hedge fund market, report finds | Advisor.ca (2024)

Canada was home to 2.1% of the world’s hedge funds in 2021, making it the fifth largest market globally, finds a report from U.K.-based SigTech.

Most of those funds were based in Toronto, which was home base for 395 or 1.4% of the world’s funds. That makes Toronto the tenth largest city in terms of hedge fund concentration.

According to SigTech’s analysis, there are 27,255 active hedge funds globally. The U.S. was by far the largest market in 2021, with 67.2% of funds based there. (New York City alone was home to 25% of the world’s funds.) The U.K. (8.6%), China (including Hong Kong; 4.4%) and Brazil (2.5%) rounded out the top four countries.

The most popular hedge fund strategies were equity long-short, multi-strategy, other equities strategies (e.g., long bias, short bias), fixed income credit, and event-driven.

The fastest-growing strategy was cryptocurrency, which accounted for 5.6% (310) of the 5,500 hedge funds launched since 2019. In 2021 alone, 171 crypto hedge funds launched, bringing the total to 774 — or 2.8% of all hedge funds.

“The robust level of new hedge fund launches reflects a sustained strong demand from investors for innovative and uncorrelated investment strategies to meet return expectations in an increasingly challenging market environment,” said Daniel Leveau, vice-president of investor solutions with SigTech. “Hedge fund growth shows no signs of abating, fuelled by the ever-increasing investment opportunities in the market, and the growth of new data and tools available to these funds.”