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From the Opalesque team:

Participants in the Opalesque New York Roundtable noted that inflows back into the hedge fund industry have changed. They are coming from outside of the “alternative” portions of investor’s portfolios.

“Hedge funds are recognized as a format of running money, not an asset class, and increasingly the consultants are also embracing that approach,” noted Carrie McCabe, CEO and founder of FoHFs firm Lasair Capital. McCabe, who prior to founding Lasair ran Blackstone and FRM in the Americas has seen a shift in the way large institutions approach their hedge fund allocations. No longer are hedge funds being kept in a separate pocket of a portfolio.

Ed Robertiello, Managing Director at Credit Suisse Asset Management, who oversees the firm’s fund of hedge funds portfolio, agrees that institutions are looking at hedge funds as financial tools rather than asset classes. And John Bader, co-chairman and CIO of Halcyon Asset Management said “Increasingly, institutions are viewing hedge funds as just another investment vehicle and are allocating to them from non-“alternative’ buckets.

Many institutional investors typically reserved only 5-10% of their portfolios for all alternatives, and hedge fund investments were only a fraction of this. If these investors embrace this change in investment philosophy and take hedge funds out of this smaller bucket, hedge fund managers will be able to stake claim to a much larger portion of assets w......................

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