The European hedge fund industry has developed somewhat differently from the industry in the United States. In Europe, there are considerable geographic differences in terms of regulatory scrutiny, tax regimes, investor demand, and hedge fund and fund of funds locations. The two most prominent countries are Switzerland and the United Kingdom. Switzerland, home to the first fund of hedge funds in the world, is still the preferred location for some of the largest funds of funds. It has a long history of private wealth channeled to the hedge fund industry. The United Kingdom is the preferred location of hedge fund managers setting up investment management companies. Analysis of the current industry characteristics focuses on geographic and strategy breakdowns, industry growth, distribution of fund size, and fee structure. The performance statistics of the two largest strategies of European hedge fund managers—long-short equity and managed futures—are examined.