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We’ve analysed the names of the 400 biggest hedge funds in the world, and looked at patterns to find the best naming conventions. “Best” in this context means correlated with a high median AuM (Assets under Management).
The result is this analysis and a name generator, to help you generate ideas:
We’ve focused on a relatively small sample, because we’ve been unable to access a public and reliable list with AuM data on smaller hedge funds. In our guide on mutual fund names, for example, we analysed more than 73 thousand funds.
Analysis of the names of the 400 biggest hedge funds
This analysis is based on a list of the 400 biggest hedge funds globally, all with an AuM above one billion dollars.
- The median AuM is $6.7bn, and the average is $19bn
- The top 25% are all above $16bn
- The bottom 25% in the sample are all below $3.3bn (so clearly still large)
As you can see from the data, the average AuM is much higher than the median. This difference is because a few hedge funds are huge, which skews the average. Therefore, we’ll base our analysis on the median, 25th and 75th percentile.
Legal notice: The data used for this analysis is gathered from a mix of publicly available online sources, which might be incorrect, incomplete, or inaccurate.
The best hedge fund names
We identified 5 naming patterns that correlate with AuM that deviate from the median:
1. Thematic words are good
Thematic words related to the strategy are generally a great idea. This is deeper than the type (e.g. “Long/Short Equity”) and includes some high-level description of what drives the decisions to short or go long a specific company. Of course, without giving away any of the secret sauce behind what makes the strategy actually successful.
2. A unique name length
This is interesting. The vast majority have 2-4 words (more than 97%), but having 1 word or 5+ words in the name is clearly correlated with higher median assets.
One possible explanation can be the uniqueness bias – fewer are doing it, so the ones that are, get more attention and are therefore more likely to attract investments.
3. Geographical focus doesn’t matter (much)
It’s very uncommon for a hedge fund to have a geographical reference in its name - about 5% of firms do, compared to more than 35% for funds in general. Those that include it have a slightly lower average AuM (especially if the geographical reference is North America).
4. Avoid acronyms
While some massive hedge funds use acronyms in their names, it’s not a great idea to do so. We see it clearly in the data that AuM is significantly lower for hedge funds with acronyms in their name. This holds true for both median and average AuM (and extends to all types of funds, not just hedge funds).
5. Common words is uncommon
As you probably guessed, unique naming is a priority for hedge funds. With that said, there are a few words that come up repeatedly – in about 10% of cases, listed here:
- Hill
- Point
- Park
- Creek
- Ridge
- Rock
- Water
However, they appear seldom enough for an analysis of AuM correlation to these specific words to be meaningless.
Starting a fund?
You have a million decisions to make. Choosing name is just one, and you also need to select a system.
Limina cover all your needs and scales from initial setup to global multi-asset portfolios.
A guide to naming hedge funds
When naming a fund, there are several pitfalls to watch out for, such as trademark issues and unintentionally using words that have unintended meanings in other languages. To help you navigate these challenges, we’ve created a top-tier naming guide for investment companies, which can also be directly applied to hedge fund names.
Closing remarks
Overall, hedge fund names correlate much less with the AuM, than do names for funds in general. For a hedge fund, it seems to matter more that a name is cool or unique, than that it follows a particular pattern. To generate ideas, scroll back up to this page and try the generator for free.
Oh, and we found no funny names, that used play on words, or were humourous in any other way. But just because no one has tried it, doesn’t mean it’s a terrible idea.
