17 Nov 2011
Preqin reports that institutional investors remain committed to investing in hedge funds despite the sovereign debt crisis and slow economic growth having a big impact on some of the best known hedge fund managers in 2011.
As institutional investors demonstrate ongoing faith in the asset class through planned increases in allocations over 2012, Preqin report it is a good time for hedge fund managers to market to the growing institutional sector of the investor community. Managers are offering increased liquidity and transparency, which continues to be at the forefront of investors’ minds.
Institutional investor satisfaction with hedge fund performance has fallen in 2011. This decrease reflects the challenging conditions experienced in 2011 due to market volatility. With concerns over slow growth and the Eurozone sovereign debt crisis continuing to hit hedge fund performance, investors retained a degree of scepticism towards the asset class over 2011. Despite these results, investors still retain confidence in the asset class to meet their portfolio objectives.
Institutional investors seem committed to hedge funds in this challenging environment, and Preqin predict that the growth of the industry in the next 12 months could be the strongest since before the onset of the global financial crisis in 2008.
Undaunted by weaker returns from certain managers, Preqin predict hedge fund investors will continue to push hedge fund assets towards the $2.6 trillion high reached in 2007 prior to the financial crisis. Over half of investors Preqin surveyed planned to keep their allocations to hedge funds the same over 2012 and only a small proportion of investors, 9%, planned to decrease the amount of capital they have invested in the space. Net inflows are expected to remain positive over 2012, reaching levels higher than in any year since the market downturn.
As institutional investors demonstrate ongoing faith in the asset class through planned increases in allocations over 2012, Preqin report it is a good time for hedge fund managers to market to the growing institutional sector of the investor community. Managers are offering increased liquidity and transparency, which continues to be at the forefront of investors’ minds.
Institutional investor satisfaction with hedge fund performance has fallen in 2011. This decrease reflects the challenging conditions experienced in 2011 due to market volatility. With concerns over slow growth and the Eurozone sovereign debt crisis continuing to hit hedge fund performance, investors retained a degree of scepticism towards the asset class over 2011. Despite these results, investors still retain confidence in the asset class to meet their portfolio objectives.
Institutional investors seem committed to hedge funds in this challenging environment, and Preqin predict that the growth of the industry in the next 12 months could be the strongest since before the onset of the global financial crisis in 2008.
Undaunted by weaker returns from certain managers, Preqin predict hedge fund investors will continue to push hedge fund assets towards the $2.6 trillion high reached in 2007 prior to the financial crisis. Over half of investors Preqin surveyed planned to keep their allocations to hedge funds the same over 2012 and only a small proportion of investors, 9%, planned to decrease the amount of capital they have invested in the space. Net inflows are expected to remain positive over 2012, reaching levels higher than in any year since the market downturn.
