New York remains the hedge fund capital of the world despite growth in London over the past few years, according to a report from International Financial Services London.

There has been much discussion of the United Kingdom taking market share from the United States due to looser UK financial regulations but New York is still home to 40 per cent of all global hedge fund assets. Another 26 per cent of assets are managed elsewhere in the United States, mainly in states like Connecticut, California, Illinois and Florida.

New York's 40 per cent market share is down from 50 per cent of total hedge fund assets in 2002, with institutional investors allocating greater sums of money to European and Asian hedge funds. Over that same five-year period, London saw total UK hedge fund assets double to about 20 per cent of the global market share by the end of 2007, about $400 billion across 1,000 hedge funds.

International Financial Services London's 2008 Hedge Funds report put worldwide hedge fund assets at about $2.25 trillion as of Dec. 31, 2007, a 30 per cent increase over 2006 and up more than 200 per cent in the last five years. The total number of hedge funds now tops 11,000, with single-manager funds accounting for about 75 per cent.