Report: Some U.S. Institutions Prefer Euro. Hedge Funds

Mar 24 2010 | 9:46am ET

A small but significant number of U.S. institutional investors favor European hedge funds, despite the uncertainty regarding alternative investments regulation across the Atlantic.

According to a new Preqin report, 17% of American institutions indicate a preference for European hedge funds. And those that do invest in European managers devote an average of one-fifth of their hedge fund portfolios to them.

“When U.S. institutional investors are searching for single-manager strategies… many are going to Europe directly to access the best funds and opportunities in the region,” Preqin’s Amy Bensted wrote in a March report.

Indeed, most of the institutions investing in Europe shun funds of hedge funds, with 68% investing directly.

Unsurprisingly, U.S. investors favor the best-known and most-successful hedge fund managers in Europe: The five attracting the most U.S. institutions are Lansdowne Partners, Brevan Howard Asset Management, GAM Holding, Lazard Asset Management and The Children’s Investment Fund.

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