Study: Most Institutions Considering Hedge Funds

Jul 5 2011 | 2:37pm ET

A new survey from Infovest21 says 60% of institutional investors surveyed see hedge funds as a possible solution to pension underfunding problems.

The Q2 2011 survey involved 32 institutions/consultants allocating to hedge funds or funds of funds.

Said Lois Peltz, president of Infovest21: "Institutional investors are primarily looking to hedge funds for non-correlated returns. Potential for higher returns, diversification, and downside protection were cited to a lesser extent."

The survey found the average institution allocated 29.2% to hedge funds and 11.4% to funds of funds. Over the next 12 months, the institutions expect their allocations to increase to 35.5% for hedge funds and 16.2% for funds of funds.

Roughly 50% of respondents have been allocating to hedge funds or funds of funds for more than 10 years.

Over 40% of the respondents said they are using equities to fund hedge funds. Fixed income and cash were each cited by almost 30%.

In terms of strategies, institutional investors were most fond of equity long/short and multi-strategy, although almost 40% of respondents said their view of the latter depended on the asset allocator.

Info21 says country-specific funds, activists, asset-based lending and mortgage-backed securities are out of favor while managed futures and distressed are getting a look-in for the first time by many institutional investors.


In Depth

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note