Citi Investor Services (Citi) recently released its fifth annual hedge fund industry Evolution Report (Report). Citi reports that hedge fund assets under management (AUM) at the end of 2013 were at an all-time high of over $2.6 trillion, and predicts that hedge fund AUM will exceed $4.8 trillion by 2018. This growth has surpassed Citi’s prior optimistic predictions. See “Citi Prime Finance Survey Predicts Hedge Fund Industry Assets Will Nearly Double by 2016 and Highlights Opportunities for Hedge Fund Managers to Grow Assets Under Management,” Hedge Fund Law Report, Vol. 5, No. 25 (Jun. 21, 2012). The Report provides insights into how hedge fund managers can position themselves to benefit from this continuing growth. This article, the first of a two-part series, covers the portions of the Report that deal with the evolution of the hedge fund investor base since the 2008 global financial crisis, the evolving role of hedge funds as “shock absorbers” in institutional investor portfolios and the shift of those investors toward risk-aligned portfolios.