Wednesday, 28 January 2015
Last updated 29 min ago
Jun 5 2008 | 11:07am ET
Expect institutional investors to increase their hedge fund allocations by as much as 50% over the next couple of years, according to one finance professor at the University of Pennsylvania's Wharton School.
Christopher Geczy, who heads Wharton’s alternative investments certificate program, said recent high-profile hedge fund meltdowns “do not immutably change the longer-term outlook” for the industry, and expects institutions to up their current 10% allocation to hedge funds to between 12.5% to 15%.
Patrick Egan, founder of Attalus Capital, which manages a $3 billion fund of hedge funds for institutional investors, added that institutions are increasingly moving into “active management” of alternative investments to achieve the actuarial rate of returns needed to pay for their employee's retirement.
However, David Lees, a senior partner of myCIO Wealth Partners, a consulting firm, warned that the risk of losing substantial amounts of capital in the alternatives space has also increased versus other investments.
“If you chose well, you can do very well, if you chose wrong, you can do substantially worse than average,” he said.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…