The last two years have seen a large but steady increase in the number of hedge funds investing in the energy industry, according to the Energy Hedge Fund Center (EHFC).
The rise in the exposure of many hedge funds to the energy industry is the result of increased investor appetite for commodities – specifically energy commodities such as oil and natural gas – as prices soar on the global markets.
In response to the trend, the EFHC has announced that it is tracking over 500 hedge funds with substantial investments in the energy market, in an effort to provide more information for potential investors.
Commenting on the increased interest of hedge funds in the energy market, Dr Gary M. Vasey, co-principle of the EHFC said: "Over five per cent of the hedge fund universe now has a good deal of exposure to energy via commodities, equities and debt.
"Many other hedge funds also have some energy exposure today marking the transition of energy from a 'dull' industry to the hottest sector for investors today."