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From Kirsten Bischoff, Opalesque New York: “Cash is now king and even good hedge funds are getting redemptions” said Dr. Matthew O’Connor, Interim Dean, Professor of Finance and Head of the Center for Alternative Investments at the Quinnipiac University School of Business. Quinnipiac in conjunction with the Greenwich Roundtable research organization recently surveyed investors in the alternative space to gauge trends in asset allocation, portfolio construction, and market sentiment.

The survey showed that 22% of respondents lowered their allocations to hedge funds and 25% decreased their allocation to long/short equity strategies. However, a quarter of the respondents added to distressed and global macro strategies and over a third of respondents plan to add to global macro strategies and trend-following CTAs.

As the investor driven flight to liquidity has continued through the fourth quarter of 2008, the number of hedge fund managers gating funds has risen to approximately 100. Almost 25% of the survey respondents addressed this issue by naming liquidity and redemption terms as factors in future portfolio reconstruction. “Investors are obsessed with liquidity and the liquidity of their hedge fund investments,” O’Connor said in a statement.

“We have indeed seen hedge funds increase their cash holdings – in some instances, significantly – over the past several months.” Pauline Modjeski, President of Horizo......................

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