Funds of funds are adding more “nimble” managers to their portfolios, favoring small to medium-size managers, according to the latest survey from Infovest21.
The hedge fund information services company polled 62 funds of funds with total AUM of $104.6 billion and found 41% of those surveyed were adding more nimble managers to their underlying portfolios. Another 38% said they had become more liquid/provided more liquidity.
Lois Peltz, president of Infovest21, said: “While one-third of the funds of funds don't have a preferred asset under management range for underlying managers, the average range of those that have a preference ranged from about $140 million on the low end to $1.4 billion on the high end."
The survey also revealed that the average asset size of the fund of funds organization responding was $1.7 billion. The respondents said, on average, at least $1.4 billion is needed to "survive and thrive."
About half of those surveyed have seen an increase in assets under management while 18% have seen a decrease over the past year.
High net worth/family offices make up over 50% of the average investor base while financial institutions comprise 18% and pensions 14%. Foundations, endowments and sovereign wealth funds comprise the remainder.
Over 60% of the average fund of funds investor base is located in the U.S. with another 18% coming from Europe and 5% from the UK. Japan, Asia, Middle East, Canada and Australia account for the remainder.