Institutional Investors Still Headings For HFs

Date: Monday, July 23, 2007
Author: Hedge Fund Daily

Highlighting a year in surveys and studies, Infovest21 has issued a white paper that suggests institutional investors continue to head for hedge funds. So, in case you missed the news as it happened, here are some of the salient findings found in the report:

--Institutional investors will represent more than 50% of projected flows into hedge funds by 2010, and will account for 40% of HF assets, up from 30% today.

--The number of institutions investing in hedge funds will rise to 25%, up from 15%.

--Institutional flows will be equally split between funds of hedge fund and single-manager funds through 2010.

--Nearly two-thirds (64%) of institutional investors allocated at least 5% of assets to hedge funds, up from 48% just two years ago, while the number of institutions not investing in hedge funds fell from 16% to 4%

--Japanese pension funds are the biggest HF investors among pensions, with 47% opting for funds of hedge funds and 43% choosing single-strategy hedge funds.

--Portable alpha mandates are becoming increasingly popular among pension funds, with some of the biggest, including the California Public Employees Retirement System, introducing portable alpha policies.

--Hedge funds are facing growing competition from 130/30 and 120/20 funds, which could pressure on HFs to lower fees.