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Its study with 100 professional investors who are collectively responsible for $276 billion assets under management, found 28% believe institutional investors and wealth managers will dramatically increase allocations to arbitrage hedge funds while 46% believe they will slightly increase them over the next 12 months.

The institutional investors and wealth managers questioned in Switzerland, Germany, Italy, and the UK agreed the strong performance of a number of arbitrage hedge funds is increasing interest in the sector. Their focus on simultaneously buying and selling assets in different markets to take advantage of price differences enabled them to generate profits and impressive returns in volatile markets when executed at scale.

MPG's research shows the hedge fund asset class as a whole will see growth in institutional investment over the next 12 months - 17% of professional investors interviewed expect a dramatic increase in allocations and 58% a slight increase in allocations.

Jeremy Leach, Chief Executive Officer of Managing Partners Group said: "Markets worldwide are expected to remain volatile for the foreseeable future and that is driving interest in the arbitrage funds which have performed so well recently.

"Hedge funds as an asset class remain attractive as highlighted by our study, but there is real confidence in the performance of arbitrage funds and their ability to benefit from price differences in different markets."

The Vita Nova investment management team may rely on economic forecasts and analysis in respect of interest rate trends, macroeconomic developments, global imbalances, business cycles and other broad systemic factors that may lead to arbitrage and alpha opportunities.