Survey: Institutions Dominant Among Hedge Fund Investors

Nov 10 2009 | 10:00am ET

Hedge funds used to be the preserve of the very wealthy individual. Now, the industry’s bread is buttered by institutional investors.

According to a new survey, nearly three-quarters of hedge fund assets belong to institutional investors, such as pension funds and university endowments. The numbers from Preqin Hedge are somewhat higher than most estimates of institutional participation in the hedge fund industry—which put the figure at closer to, although above, 50%—because the firm included funds of hedge funds in the institutional investor group.

The survey also founded that the bigger the hedge fund, the bigger the institutional client list. Institutional investors, on average, account for 88% of the assets at hedge funds with more than $1 billion. Those with between $500 million and $1 billion owe 73% of their assets to institutional clients, while the figure for funds with between $200 million and $500 million is 75%.

The difference between larger and smaller funds could not be more dramatic. Hedge funds with between $10 and $20 million can thank institutions for just 46% of those assets, funds with between $5 million and $10 million just 38%. Institutional investors account for just 20% of the assets at hedge funds with less than $1 million.

Preqin polled more than 300 hedge fund managers for the survey.


In Depth

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...

 

From the current issue of