Opalesque Industry Update - 61% of hedge fund capital now comes from institutional investors; managers adapting to suit demands of new investor universe.
In the latest Preqin study, hedge fund managers revealed that they are altering their fees, risk adjustment procedures and strategic offerings to attract institutional investors to their hedge funds. Institutional capital is at an all time high within the sector, and 85% of the 60 hedge fund managers interviewed believe that it will increase even more over the next 18 months.
The study showed:
• 46% of managers have put more risk management procedures in place as a result of having more institutional investors in their funds.
• 42% have reduced the fees charged on funds.
• 21% have introduced alternatives to commingled funds to attract or maintain institutional interest.
• 57% of respondents stated that over half of their assets come from the institutional sector • 47% of managers have seen an increase in institutional capital over the past three years, increasing to 56% over five years.
• Almost half of those surveyed plan to market specifically to the institutional sector in the coming 12 months.
• 15% expect to launch UCITS-structured hedge funds; institutional investors are increasingly keen to take advantage of the transparency and liquidity requirements of these fund structures.
• The mean AUM requirement of a hedge fund investor is $320mn; hedge funds with over $10bn in AUM have significantly more institutional investors than their smaller counterparts.
Full study can be viewed here: Source