Study: 28% Of Institutional Investors To Up HF Allocations In 2012

Mar 14 2012 | 10:58am ET

A full 28% of the institutional investors polled by Commonfund expect to increase their allocations to hedge funds over the next 12-18 months and 30% expect hedge funds to outperform the S&P 500 in that period.

Commonfund polled 222 institutional investors with combined assets of $239 billion for its second annual Investor Outlook Survey. The figure for expected increases in allocations to hedge funds represents a slight increase over last year's total of 27%..

A majority of respondents (53%) said they would increase their allocations to emerging market equities while 44% planned to increase allocations to natural resources. Another 40% planned to increase allocations to venture capital and private equity and 37% said they would increase allocations to real estate.

On the flip side, the biggest decreases in allocations were expected in U.S. Treasuries, European equities and cash; plus core U.S. fixed income and Japanese equities.

Overall, investor expectations for 2012 are reasonably strong with an average forecast for the S&P 500 Index of 8.3% and a median forecast of 9.0% (almost unchanged from last year).

Institutional portfolios are expected to increase by 7.6%, on average, over the next five years.

"The positive expectations for the markets and asset allocations indicate that participants continue to be positive about 2012 reflecting the continued improvement in the U.S. and much of the world economies," said Verne Sedlacek, president and CEO of Commonfund. "Increased allocations to emerging market equities, natural resources and commodities extend last year's strong outlook and the recovery from 2008-2010."


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Saxby: Not All EBITDA Is Created Equal

Nov 30 2017 | 8:02pm ET

Record levels of dry powder are driving competition among private equity firms to...