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By Beverly Chandler, Opalesque London:

A report from specialist research firm Preqin, entitled 'Institutional Investors on the Hunt for Hedge Funds’finds that there could be up to $195bn earmarked for new hedge fund investments in the next 12 months. The report claims that the time is ripe for hedge fund managers to market to the growing institutional sector of the investor community. However, it believes that in order to gain the interest of the increasingly sophisticated institutional market, managers must first understand the variation between investors within the institutional universe and the differing needs and demands of the investors allocating fresh capital in the next year.

Funds of funds represent the largest group looking for new hedge funds to invest in, according to Preqin, with over half of all funds of funds looking for new vehicles over the next 12 months. The report says: "Multi-managers constantly monitor funds in the marketplace in order to source the best opportunities for their investors and to keep abreast of new and emerging strategies. Such fi rms traditionally have a higher turnover of investments, as well as larger portfolios and a shorter typical holding period when compared to other institutional investors."

Preqin gives the example of Permal, the $23 bn fund of fund that it claims could add up to 25 new funds to its portfolios over the next 12 months, as a result of a new fund of funds launch and natural turnover within its existi......................

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