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Alternative Market Briefing Weekly

Opalesque Roundup: Institutions and family offices shift to hedge funds and alternatives despite valuation concerns: hedge fund news, week 30

Saturday, July 22, 2017

In the week ending 21 July, 2017, the global trend to shift into alternative assets is gathering pace more institutional investors are turning to private equity and hedge funds. At the same time, more market participants are also concerned about the inflated valuations across liquid and illiquid assets, and that future returns in alternative investments will largely lag behind their past returns.

Total hedge fund assets rose to $3.1 trillion, a quarterly increase of $34.1 billion, driven by net inflows of $6.7 billion. Another report by Eurekahedge showed that hedge funds attracted net inflows in the first half of 2017, reversing $70bn redemptions in H2 2016.

Meanwhile, the mega rich are increasingly setting up family offices to stash their cash aside from hedge funds. With their estimated assets of $4 trillion, family offices tend to favor long-term investing in order to preserve wealth over multiple generations. Still, around 15 to 20 percent of family office assets are estimated to be in alternative investment funds.

A study by the CCSF showed that investment returns of institutional investors, including foundations, have improved in 2016; trustees of the Illinois State Board of Investment, Chicago, adopted a new asset allocation that eliminated hedge funds as an asset class; Dutch pension fund for doctors SPH, cut out its defensive equities and hedge funds strategies; and none of the five largest Dutch pension funds generated positive returns during the second quarter of this year.

Larry Fink made an interesting comment sa......................

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