The big players in the hedge fund world are no longer high-rolling, wealthy individuals, but pension funds, university endowments, foundations and government authorities, an industry trade group said Wednesday.

High net-worth individuals traditionally accounted for the lion's share of hedge-fund assets, but institutional investors have been "steadily increasing" their slice of the pie in recent years, according to Tom Kehoe, research manager of the Alternative Investment Management Association.

Whereas three years ago, institutional investors accounted for about one-third of total assets under management, they now account for half. Pension funds have been particularly aggressive, now holding about one-sixth of total assets, according to AIMA.

The trade group, whose 1,200 members manage 75% of global hedge-fund assets, says it performed "extensive consultation" with hedge-fund managers, advisers and service providers to come up with its results. The findings are especially telling, as big institutional funds have had some high-profile issues due to the financial crisis.

The Harvard endowment lost billions of dollars last year from its exposure to tricky financial products and faced margin calls from counterparties like

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Dozens of pension funds, foundations and charities also may have lost millions from investments with Bernard Madoff, the alleged Ponzi schemer who claimed to run a profitable hedge fund. Among those potential victims were foundations run by Hollywood producer Steven Spielberg, real estate investor and publisher Mort Zuckerman,



CEO Jeff Katzenberg, Sen. Frank Lautenberg (D., N.J.) and writer and activist Elie Weisel.

While not every hedge fund is a fraud, even legitimate funds have suffered from risky bets and complex investment vehicles during the financial crisis. Some would say those overseeing funds for charities, foundations and retirees should have put a higher premium on risk tolerance. But AIMA CEO Andrew Baker emphasizes the stable returns and risk management skills that some hedge-fund managers exhibited last year.

"These figures demonstrate that the hedge fund industry plays an extremely important role globally for the institutions that look after everyone's pensions and savings," Baker says in a statement. "Hedge funds and funds of funds are skilled at managing risk and delivering stable returns, which institutions need at this time more than ever. They offer an extension of investment capabilities to institutional investors through their skills and expertise."