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Preqin forecasts investments into hedge funds could reach up to $195bn in next 12 months

Tuesday, July 12, 2011
Opalesque Industry Update - According to Preqin, a data provider for the alternative assets industry, investments into hedge funds could reach up to $195bn in the next 12 months.

The firm’s latest hedge fund investor study shows that one third of investors plan to commit between $125bn and $195bn combined to the asset class. Of these, nearly half will look into putting their money in funds of hedge funds (FoHFs) and more than half of the surveyed FoHFs are looking for new investments too.

The study found other interesting pieces of information on what investors are planning to do in the next 12 motnhs: a third of public pension funds will look into making extra allocations into hedge funds (half of which in FoHFs) and the same goes for two third of private sector pension funds. Europe-based investors have the greatest appetite for new commitments, says the study; 45% are seeking new opportunities,compared to 29% of North American, and 32% of Asia and Rest of World-based investors.

Of those investors who plan to invest in hedge funds, half may prefer North America-based managers; a majority will look into long/short equity strategies; most also anticipate including an allocation to one or more single-manager funds; and 19% are looking to start a managed account.

New and small managers may be back in favour: nearly a third said they are more open to emerging managers than a year ago; but nearly two third will focus on managers who have a track record of at least three years; and more than a third will consider vehicles which manage less than $100m.

The full Preqin report can be accessed here: Source


Hedge funds took in $8.1bn in May, bringing YTD inflows to $75bn. However, the volatile markets of 2011 have still taken their toll and total industry assets remain unchanged at $1.79tln recently reported TrimTabs Investment Research and BarclayHedge. HFN said on Monday that estimates for asset flows following the June -0.99% performance drop saw an increase of $6.4bn in the rate of redemptions, outpacing allocations for the first time in a year. Meanwhile, Hedge fund flows as measured by the GlobeOp Capital Movement Index were negative 0.2% in July.

B. Gravrand

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