•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

Komfie Manalo, Opalesque Asia:

Poor performance is pushing family offices away from hedge funds, Bloomberg said, citing a report by UBS Group AG and Campden Wealth, a London-based research firm. This trend, if it continues, could have a major impact on the industry.

Philip Higson, vice chairman of Zurich-based UBS’s global family office group, told Bloomberg, "The reduction in allocation to hedge funds comes down to two concerns: high fees and disappointing performance."

The report said that family offices have reduced their hedge funds positions by 10% in the past 12 months ending in May.

Several institutional investors, most recently the New Jersey public pension, have been reducing their hedge funds exposures after their average annual return fell 0.3% in 2015 from 6.5% in 2014. Aside from hedge funds, wealthy family and institutions are also pulling back on bonds and other similar asset class and instead focusing more in illiquid investments, including real estate and private equity.

Higson added, "There will be an assessment of whether they’re doing too many things and whether they can get better value by focusing on fewer counterparties. This is about being more considered and more cautious."

In the years to come, family offices will be paying close attention to costs, Higson said because of poor performance.......................

To view our full article Click here