Survey: Investors Wary Of Hedge Funds

Oct 15 2008 | 11:52am ET

While investors still believe that hedge funds offer the potential for strong returns in the current environment, most are still wary of the unregulated industry.

According to the London-based Association of Investment Companies, a poll of 1,300 private investors showed that some are concerned about high fees (12%) while others found them confusing (11%) and believe they are only accessible to the wealthy (5%).

Although some sophisticated private investors are wary of hedge funds, 6% said they were already investing in hedge funds, while 5% have invested in the past and 3% are planning to invest in the future. Interestingly, nearly half (46%) of investors believe they may invest in hedge funds in the future whilst only 29% of investors surveyed said they would never invest in hedge funds.

“Many of these investors’ concerns over hedge funds are addressed through the listed hedge fund and fund of hedge funds sectors,” said Annabel Brodie-Smith, AIC’s communications director. “The listed structure of closed ended hedge funds and fund of funds means investors have access to a much higher level of transparency. Shares in listed funds are available on the stock market just like any other share so they are available to those of modest means as well as the super wealthy.”

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