Why Do HFs Have Way Lower AUM Than PE Despite Public Markets Being More Scalable?
Despite public markets being more scalable and liquid with MMs/pod shops having a bunch of guys running different strategies, why are HFs so tiny AUM-wise compared to PE funds? BX has like $1 tril AUM by now and APO has ~$500bn, ~$550bn. The only hedge fund with over $100bn AUM is Bridgewater, while the massive well-known MMs like C/P72/MLP have $30-$40bn AUM.
Volatility exists and HF is mark-to-market. You can deploy much more AUM in PE with greater consistency. Plus regulatory environment is very different when you own more than even a small chunk of a public company vs it's relatively straightforward to acquire 100% of a private one (plus you actually get to control what's done by the company itself).
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