Q4 2013 Hedge Fund Industry Data
The fourth quarter of 2013 capped off a remarkably strong year for risk assets, translating into exceptional growth for the hedge fund industry. Qualifying Hedge Fund net assets surged by 10% from the prior quarter, reaching $2.388 trillion. As the Fed finally announced a measured taper in December, markets absorbed the news smoothly, confirming a highly supportive environment for hedge fund performance.
Key findings this quarter:
- 1Qualifying Hedge Fund NAV experienced a massive 10% quarter-over-quarter surge, reaching $2.388 trillion.
- 2The Fed’s "dovish taper" in December was well-received, boosting asset values.
- 3The finalization of the Volcker Rule began shifting market-making dynamics toward hedge funds.
- 4Gross Notional Exposure expanded considerably as funds maximized return potential in a low-volatility environment.
Macro Environment
Q4 2013 saw the resolution of the October U.S. government shutdown and a surging equity market. The S&P 500 finished the year up nearly 30%, its best performance since 1997. In December, the Fed officially announced the beginning of tapering its bond purchases, but coupled it with strong forward guidance indicating rates would remain low for a long time. Markets reacted positively. Hedge funds, fully deployed in equities and selected credit strategies, rode the wave of corporate buybacks and M&A activity.
Regulatory Context
By the end of 2013, Form PF data had become an established tool for the SEC and OFR. The Volcker Rule was finalized in December 2013, fundamentally altering how banks could interact with covered funds. This began a long-term structural shift where hedge funds increasingly stepped into the market-making and liquidity-providing roles historically held by bank prop desks.
Future Outlook
Entering 2014, the industry outlook was broadly positive but cautious regarding valuations. With tapering underway, managers anticipated higher volatility and a potential return to a "stock picker’s market" characterized by lower correlation among individual assets, creating ideal conditions for fundamental long/short equity strategies.
What moved most this quarter
Qualifying Hedge Funds Net Assets
Significant quarter-over-quarter change based on OFR Form PF data.
Estimated Gross Notional Exposure
Significant quarter-over-quarter change based on OFR Form PF data.
Industry Size
Qualifying Hedge Funds Net Assets
Net assets surged by a massive 10% to $2.388 trillion.
Leverage
Estimated Gross Notional Exposure
Gross notional exposure increased significantly to an estimated $14.5 trillion.
Complete Metric Changes
| Metric | Prior Q | Current Q | Change |
|---|---|---|---|
| Qualifying Hedge Funds Net Assets | 2,171 | 2,388 | +10.00% |
| Estimated Gross Notional Exposure | 13,100 | 14,500 | +10.68% |
Frequently Asked Questions
What was the Q4 2013 total NAV for Qualifying Hedge Funds?
The NAV jumped significantly to $2.388 trillion, representing a 10% increase from Q3.
How did the Volcker Rule affect hedge funds at the end of 2013?
Its finalization accelerated the shift of risk-taking and market-making activities from bank proprietary trading desks to independent hedge funds.
Why was the $2.38 trillion figure notable?
It demonstrated a full recovery and aggressive expansion of the industry’s capital base, capping off one of the strongest years for equity markets in recent history.
Methodology & Source Notes
Data is sourced from the definitive OFR Form PF aggregated releases. Comparisons are made quarter-over-quarter. All financial values are estimates based on aggregated filings and subject to reporting lags.
Data Provider: U.S. Office of Financial Research Hedge Fund Monitor. We fetch the latest publicly available aggregated data releases representing SEC Form PF submissions.
Reported values can be subject to revision by the OFR in subsequent quarters. We update historical tables to reflect these revisions where available. This analysis is provided for informational and educational purposes only and does not constitute investment advice.
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Previous Reports
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Q3 2025 Hedge Fund Industry Data
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Q2 2025 Hedge Fund Industry Data
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