Credit Suisse: Investors Confident Hedge Fund Assets Hit $2T

Apr 7 2010 | 11:02am ET

Hedge fund assets may hit their pre-financial crisis peak this year, according to the people in a position to make that happen.

A Credit Suisse Group survey of about 600 institutional investors show a confidence that the industry could be managing $2 trillion by the end of December, an increase of 25% this year. Much of that growth will come in the Asia-Pacific region, with 61% of survey respondents saying they are increasing, or might increase, their allocations to the region.

While they’re ready to pour more money into the asset class, institutional investors are more wary, and more selective, than they were before the financial crisis. Due-diligence takes more time, with 65% saying they spend more time investigating managers before they invest. The due-diligence process now takes almost six months, 30% longer than 18 months ago.

And investors are putting their increased allocations with fewer managers. The average number of hedge fund managers employed by those surveyed fell 17% over the last year-and-a-half to 48.

“Investors are taking a more selective, thoughtful approach and concentrating their investments with the managers in whom they have the greatest degree of trust,” Benjamin Happ, head of capital services in Hong Kong for Credit Suisse’s prime services division, said.


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