By |Published On: October 19th, 2015|Categories: Uncategorized|

Ray Dalio, famous for running Bridgewater, the world’s largest hedge fund, is famous for mocking the growth in the hedge fund industry:

There are about 8,000 planes in the air and 100 really good pilots.

Every time I hear that quote I think, “Wow, so many managers are out there trying to get paid big fees!”
Well, 8,000 is a LOW guesstimate of the planes in the air…

Turns out there are over 24,000 pilots going for the “2/20” payment scheme (~10,000 identify as hedge fund specific).

Here is a link to the recent compilation of the private fund statements from form PF and ADV data (h.t., Cipperman Compliance).

Here is the table on the # of funds in the private fund space–24,000+! Wow.
www.sec.gov_divisions_investment_private-funds-statistics_private-funds-statisti_2015-10-19_08-28-16
And who are the suckers buying all these things? Government and private pension plans.
www.sec.gov_divisions_investment_private-funds-statistics_private-funds-statisti_2015-10-19_08-30-51

About the Author: Wesley Gray, PhD

Wesley Gray, PhD
After serving as a Captain in the United States Marine Corps, Dr. Gray earned an MBA and a PhD in finance from the University of Chicago where he studied under Nobel Prize Winner Eugene Fama. Next, Wes took an academic job in his wife’s hometown of Philadelphia and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management firm dedicated to an impact mission of empowering investors through education. He is a contributor to multiple industry publications and regularly speaks to professional investor groups across the country. Wes has published multiple academic papers and four books, including Embedded (Naval Institute Press, 2009), Quantitative Value (Wiley, 2012), DIY Financial Advisor (Wiley, 2015), and Quantitative Momentum (Wiley, 2016). Dr. Gray currently resides in Palmas Del Mar Puerto Rico with his wife and three children. He recently finished the Leadville 100 ultramarathon race and promises to make better life decisions in the future.