Sun, Apr 20, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Preqin: 20% of institutional investors make an average of four or five investments in hedge funds per year

Friday, May 11, 2012
Opalesque Industry Update - Hedge fund investors are keen to commit to the asset class, with more than half making two or more investments on average per year, a Preqin study reveals. Just under one-third make between two and three new investments per year, while 17% make between six and ten.

The study also found that institutional investors can be a long-term and stable source of capital for hedge funds; over one fifth of investors are keen to keep capital invested in a fund for over five years and 16% state that this is the minimum time for which they will stay invested in a fund.

The study also found:

 33% of investors invest in a hedge fund for a minimum of six months to one year
 32% have a minimum holding period of 25 months to three years
 The majority of investors make at least one redemption a year
 39% of investors make redemptions due to performance concerns
 20% make redemptions due to an internal change in portfolio strategy
 41% of investors use consultants as one method of sourcing new hedge funds
 38% look to source new funds directly from proposals received from fund managers
 66% will invest within six months of first viewing the fund proposals
 20% of investors stated that returns were the most significant factor when looking at new fund investment proposals
 20% stated that the source of returns and the strategy were the most important factor

Please see the report for the full run down of findings: www.preqin.com/docs/newsletters/HF/Hedge_Fund_Spotlight_May_2012.pdf

Comment
“Flow of capital through the hedge fund portfolios of institutional investors is very dynamic, with the majority of investors making regular redemptions and replacements of hedge funds in their efforts to boost portfolio returns, diversify holdings and gain access to managers providing elusive alpha. Therefore managers seeking new capital can expect good opportunities from even those investors that have filled their target allocations to hedge funds, as well as investors with unfilled allocations to the asset class.

Institutional investors are also good long-term sources of capital; almost half will keep their capital in a fund for more than three years if the vehicle performs as projected. However, many investors have been disappointed by the returns from their hedge fund investments over the past year and, as such, those managers with a strong track record and proof of solid returns are likely to be the most successful in attracting institutional capital in the coming year.”
Amy Bensted – Head of Hedge Funds Research

BG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
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. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  3. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  4. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  5. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo