Opalesque Industry Update - The 2008 credit crisis may not have slowed the influx of capital into the hedge fund industry, but it did change the way institutional investors look at the individual funds they invest in. Just as regulators have heightened their oversight of the hedge fund industry, institutions have stepped up the due diligence they perform on individual hedge funds and have lowered their tolerance for risk and illiquid investments. The New York Hedge Fund Roundtable recently surveyed its membership about the changing investor landscape and how it is impacting hedge funds’ practices, or is likely to do so in the future. Members of the Roundtable believe that as more and more money continues to flow into the hedge fund industry fund managers will not only have an increasingly difficult time putting that money to work, but more modest returns will become commonplace throughout the industry. “The credit crisis had a significant impact on the ways institutions approach alternative investments,” said Timothy P. Selby, President of the New York Hedge Fund Roundtable. “Alternative investment fund managers will need to be vigilant in studying the interests of the investor community and make adjustments to keep them interested and engaged. This may include periodically assessing fee and liquidity concerns.” An investment consultant’s view of the hedge fund industry was the topic of the Roundtable’s December event, where Ryan O’Quinn, a principal with investment consulting firm Prime Buchholz, shared his thoughts on some of the shifts that have occurred in the way investors approach hedge fund investments. Members of The New York Hedge Fund Roundtable had the opportunity to weigh in on the changing investor landscape at the December event, as well as through an online electronic poll. *Of the respondents to this survey, 34% were fund managers; 22% were allocators; 5% were risk management or trading; 38% were service providers and 1% were other industry participants. Following are some of the key findings of that survey:
December’s “bonus” question: This year marks the 50th Anniversary of “A Charlie Brown Christmas,” which would put Charles M. Schulz’s famous characters in their late 50s if they had grown up. Roundtable members were asked what they think the characters would be like/be doing today if they had aged. 41% of respondents said Schroeder would, of course, have gone on to become a famous composer; 25% think that years of being excluded from parties and events would have driven Charlie Brown to prove his worth and that he’d have gone on to become a successful investor rivaling even Warren Buffett –success that will have changed the little red haired girl’s tune and motivated her to marry him; 18% believe that Lucy’s focus on popularity and the continuation of her mean girl ways throughout high school will have caused her to fail out of college, leaving her working as a waitress and struggling to make ends meet; and 16% think that years of being picked on, heckled and left out of everything will have completely messed with Charlie Brown’s head, causing him to snap and become a serial killer –with Lucy becoming his first victim.
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Industry Updates
Hedge fund industry thinks more modest returns will become commonplace
Friday, December 18, 2015
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