Fri, Sep 30, 2016
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   |   
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 funds recover from losses as central banks give markets a respite[more]

    Komfie Manalo, Opalesque Asia: The Lyxor Hedge Fund index was up 0.4% from the week ending September 20 (-2.4% YTD), supported by the willingness of central banks to remain accommodative, Lyxor Asset Management said in its weekly briefing. It ad

  2. Perry Capital closing flagship fund after almost three decades[more]

    From Blooomberg.com: Richard Perry, one of the biggest names in hedge funds, is calling it quits after 28 years. Perry, 61, is winding down his New York-based flagship fund as the industry confronts one of the most tumultuous periods in its history. In a letter to investors Monday, he said his style

  3. Eden Rock buys Gottex stake in ERG Asset Management[more]

    Matthias Knab, Opalesque: Eden Rock Group announced the purchase of Gottex’s stake in ERG Asset Management and so the firm is now wholly owned by Eden Rock. The two firms established the joint venture in 2011 to focus on providing cost effective solutions to funds holding illiquid investments, as

  4. "Hedge fund industry needs to shrink"[more]

    Komfie Manalo, Opalesque Asia: Writing for CNBC, Josh Brown, creator of The Reformed Broker blog and financial advisor for Ritholtz We

  5. Strategy - Voyager Management wants to invest in smaller hedge funds[more]

    From Valuewalk.com: Voyager Management, a $475 million fund of funds, is looking to downsize the hedge fund’s in which they invest, looking for smaller funds with assets under management that enable the fund to be nimble. The fund is looking for noncorrelation and will consider long / short equity