Deutsche Bank Survey: Growth Expected among Large Funds, Quant & Asian Strategies

Mar 3 2015 | 10:20am ET

A new survey by Deutsche Bank’s Global Prime Finance unit reveals investors are continuing to favor the largest funds for new allocations, while quantitative strategies are gaining increasing attention and Asia is rapidly coming back onto the radar.

The bank’s 13th annual Alternative Investment Survey asked 435 investors, representing over $1.8 trillion in assets under management, for their insights on allocation plans and sentiment for 2015, according to a press release. 

Among the findings is continued growth in assets for the hedge fund industry. Total assets under management are expected to grow 7% by the end of this year, to more than $3 trillion. Fully 39% of the respondents to Deutsche’s survey expect to increase their allocations to hedge funds this year. 

However, this growth continues to be concentrated in the largest managers, making it harder for new managers to break into the top tier. Since 2008, firms with more than $5 billion in AUM have grown 141%, versus only 53% for firms managing less than that. Deutsche estimates that more than 60% of the industry’s total assets are managed by fewer than 200 hedge funds.

The survey also found that one-third of respondents are planning to increase allocations to quantitative strategies this year, following strong performance by the segment in 2014. The strategies cited by respondents include CTA, quant equity neutral and quant equity.

One-third of the respondents are also planning to increase allocations to Asian managers this year, up from 19% last year. Meanwhile, 25% see opportunity in China this, up from 11% by AUM last year, and 26% are planning to increase exposure to India, up from only 4% last year. 

Investors from 26 nations took part in the survey, half of which manage more than $1 billion and 20% manage over $5 billion. 

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