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Institutional investors hedge fund allocations set to soar

Friday, May 20, 2011
Opalesque Industry Update -Significant inflows of institutional investor capital is expected to flow into the hedge fund industry, after 94% of surveyed institutions indicated they could increase hedge fund allocations over the next three years, says a new report by Preqin. While the past few years have been sluggish in asset recovery, 20% of institutional investors have been beefing up their hedge fund teams, and those that have not indicate that they are developing in-house hedge fund specialist teams over the next three years.

“The hedge fund universe is difficult to negotiate, therefore it is no surprise that one-fifth of investors have expanded their investment teams over the past year. With many investors planning to increase their allocation to the asset class, as well as to move to a more direct style of investment over the next two or three years, the proportion of investors with hedge fund-specific teams is likely to grow further,” said Amy Bensted, Manager, Hedge Fund Data at Peqin in a statement released on Friday.

Amongst the results of the Preqin survey are:

  • 30% of institutional investors will definitely invest more capital in hedge funds over the next three years and a further 64% are considering doing so.
  • 32% of those currently investing in fund of funds will start investing directly and an additional 8% are considering doing so
  • 33% of investors that intend to increase their hedge fund allocation in the next three years will hire additional hedge fund staff
  • 48% of fund of funds investors that are planning to start investing directly will increase the size of their investment team
The full report may be read here: Source

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