High Net-Worths, Family Offices Increase Hedge Fund Investments

Mar 22 2013 | 11:19am ET

The inexorable march of pension funds into hedge funds has slowed, as the industry's earliest backers returned to the fore during a difficult period.

Family offices and high net-worth investors account for 54% of hedge funds' investor base, according to an Infovest21 survey. Pensions make up just 8% of that base.

Family offices actually increased their share of hedge fund investments compared with 2010, Infovest said. Foundations, which make up 3% of the industry's investor base, also increased their share.

By contrast, all other types of investors saw their share fall. Funds of funds now account for 13% of the investor base, financial institutions 11% and sovereign wealth funds for 3%.

As the industry returns to form and the economy begins to grow, those investors are expected to add to their hedge fund investments. Infovest President Lois Peltz said that high net-worth investors and family offices will see their share drop to 49%, while private funds will rise to 15%, pensions to 9% and foundations to 4% over the next year. Financial institutions are expected to hold at about 11%, while SWF fall back to just 1.7%.

The Infovest Manager Snapshot Survey also shows that the average hedge fund has 110 investors, that 90% posted performance gains last year, and that fees are falling. The average management fee was 1.5% and the average performance fee 18.2%; 19% of hedge funds lowered the former last year and 10% the latter.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

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

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.