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Alternative Market Briefing

45% of institutions now invest in hedge funds, becoming their largest allocators

Monday, April 02, 2018

Komfie Manalo, Opalesque Asia:

Institutional investors are now the largest allocators in hedge funds with more than $2tln invested in the space, and over 5,250 institutions - 45% of the total institutional investor universe - actively invest in the asset class, a new study by data provider Preqin said.

The study also found that a small proportion of these investors, though, account for the greatest allocations, with just three investor types representing more than half of all institutional capital in hedge funds. Public pension funds and private sector pension funds represent 9% and 15% of hedge fund investors respectively, but they account for 22% and 19% of institutional capital in the asset class.

Amy Bensted, head of Preqin's hedge fund products, commented, "Hedge funds have become an important part of the portfolios of many institutional investors. Almost 5,300 institutions globally are active in the asset class today: collectively they invest more than $2tn in hedge funds, accounting for 58% of the total capital in the industry. However, more than half of this $2tn is invested by just three investor types: public and private pensions and sovereign wealth funds. Although many more endowments and foundations are actively investing in hedge funds, typically with much higher allocations to the asset class, their total allocations are only on par with these groups, due to the sheer size of many of these pension and......................

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