Institutional Disappointment With HF Returns Up In 2012

Feb 12 2013 | 9:04am ET

Many institutional investors were not overly thrilled with the return on their hedge fund investments in 2012, according to new research from Preqin.

The research firm found that 41% of the 85 institutional investors surveyed reported their hedge fund returns had failed to meet expectations last year. That means disappointment with performance is at its highest level since the research firm began collecting this data in 2008.

Only 3% of those polled said the return on their hedge fund investments had exceeded expectations, down from 11% in 2011.

On the bright side, 57% of the institutional investors polled felt their hedge fund investments had met expectations, and that's up from 49% in 2011 and 53% in 2010.

Disappointment in 2012 hedge fund returns translates into the first place ranking of performance as a priority in 2013. Other key issues cited by investors include regulation (24% of respondents) and fees and transparency (23%).

Asked about the increasing regulation of hedge funds, 49% of institutional investors expected this to have a positive change, 33% expected a negative change and 18% expected no change. Investors felt that regulations could be positive due to increased transparency and oversight, although some investors believe regulations may drive up costs and make it more difficult for smaller, more nimble hedge fund managers.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

The London Whale saga is a twist on the typical rogue trader story as the rogue trader recognized the error of his ways and was prepared to take his medicine but was instructed by superiors to “defe...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.