Fri, Mar 24, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Asian investors put faith in emerging hedge fund managers while Western investors shy away says Preqin

Friday, December 09, 2011
Opalesque Industry Update - Proportion of Asia-based investors willing to commit to emerging manager hedge funds has increased by 11 percentage points in the past year.

While European and North American investors are shying away from investing in emerging manager hedge funds, Asian investors are increasingly keen to commit to such funds, the latest Preqin research shows. Fifty-eight percent of investors in the region are prepared to invest in emerging manager hedge funds, compared to 39% of European investors and 48% of those in North America. Emerging manager hedge funds are generally considered more risky due to the manager’s lack of track record; as investors remain cautious about making new hedge fund investments it is perhaps understandable that they would be less keen to commit to emerging funds. However, Asian investors were generally less affected by the downturn than those based elsewhere, which could explain their continued, and indeed increased, confidence in the asset class and their enthusiasm for emerging manager funds.

The willingness to invest in emerging manager funds varies with institution type; this is shown in the graph here.

Other Findings:
 48% of investors will commit capital to first-time funds, a decline from 54% in 2010.
 Spin-off teams have become less attractive to investors; the proportion willing to invest has fallen from 61% in 2009 to 43% in 2011.
 Just over one-fifth, 21%, of investors are willing to provide seed capital.
 83% of investors believe that emerging manager funds have the potential to offer better returns than more established funds.
 78% of investors will invest with managers that have less than $500mn in AUM.
 11% will only invest with managers with over $1bn under management, twice the proportion noted in 2010.

Comment:
“Over the past three years fundraising conditions for newer funds have become increasingly difficult as many institutions eschew emerging managers in favour of vehicles with longer track records. However, our results indicate that nearly half, 48%, of investors would still invest or consider investing in emerging managers, even in this difficult fundraising environment. In 2012, emerging manager vehicles are likely to appeal to investors disappointed by the returns from their existing hedge fund portfolios. Similarly, with fees also a key issue for institutional investors at present, emerging managers willing to negotiate fund terms with potential investors could also be successful in attracting capital.” Amy Bensted, Manager – Hedge Fund Data

Preqin is the leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and bespoke data requests. www.preqin.com

BG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Hedge fund liquidations in 2016 surpass 2009 levels, new launches decline[more]

    Benedicte Gravrand, Opalesque Geneva: Even as the hedge fund industry's total assets exceeded the $3tln milestone last year, hedge fund liquidations increased. So much so that 2016 had the highest number of liquidations since 2008, claims the latest HFR Market Microstructure Report, re

  2. Hedge funds find no joy in macro as returns lag Trump rally[more]

    From Gulfnews.com: In 2017, macro hedge funds were expected to shine. So far? Not so much. It's been a far from impressive first two months for funds that trade around macroeconomic events. Discretionary funds rose just 0.3 per cent through February, according to Hedge Fund Research Inc., while the

  3. Strategies - Billionaire investor Marc Lasry shares how he's playing markets right now, Classic models are failing FX hedge funds desperate for return[more]

    Billionaire investor Marc Lasry shares how he's playing markets right now From CNBC.com: Buy on the prospect of deregulation. Sell on the enactment of deregulation. That's the strategy that billionaire investor Marc Lasry is implementing, according to an interview with CNBC in Las Vegas

  4. Opalesque Exclusive: Aberdeen makes the case for the lower mid-market[more]

    Bailey McCann, Opalesque New York: Aberdeen Asset Management has released a new paper focused on lower mid-market private equity. According to the paper, this segment of the private equity market is gaining popularity with private equity investors that are looking for multiple expansion and less

  5. Hedge funds await outcome of French elections, feel pinch on lower oil prices & weak dollar[more]

    Komfie Manalo, Opalesque Asia: Hedge funds felt the pinch of lower oil prices and weak U.S. dollar as the Lyxor Hedge Fund Index was marginally down as of the week ending 14 March, Lyxor Asset Management said in its Weekly Briefing. The Lyxor He