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Benedicte Gravrand, Opalesque Geneva:

Investors were more interested in strategies uncorrelated to equity markets, more liquid strategies and were less interested in equity long/short strategies in 2011, and continue to be so, according to recent reports from BNP Paribas and Deutsche Bank.

Despite a fund weighted gain of 1.3% in Q4-2011 after a drop of 6.7% the previous quarter (Hedge Fund Research), overall underperformance compared to broader financial markets made 2011 a difficult year for the majority of hedge funds, according to the latest report from corporate and investment bank BNP Paribas called Hedge Fund Barometer: 2011 Q4.

Interest in mainstream strategies and big name hedge fund managers decreased overall in Q4, as indeed, investors showed more interest in niche, uncorrelated strategies, especially those with high liquidity. And more institutions are ready to look at smaller and emerging managers, as well as those with a narrower focus – geographical or sector-wise.

"Capital Introduction activity continues to reflect significant interest from fund of hedge funds and family offices, with many institutions launching or expanding on particular platforms to diversify asset classes and broaden exposure," the BNP report says.

Assets in the hedge fund industry, globally, rebounded to around 21tln in 2011 (Hedge Fund Research), even though there were few movements in Q4. Total inflows ......................

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