Preqin: Investors still back hedge funds

Date: Tuesday, February 17, 2009
Author: Barney Hatt, Trustnet.com

Over three-quarters (76.9 per cent) of investors said the turbulence of the last year has not affected their confidence in the hedge funds industry, according to a survey by Preqin.

'The Institutional Investor Outlook for 2009' Preqin survey was conducted in late January 2009 across a range of institutional investors including pension funds, banks, endowments and insurance companies around the world. Investors surveyed had assets under management ranging from $100m to $35bn.

Investors said they would continue to invest or increase their allocation to hedge funds. Approximately one quarter of all investors polled said they would be increasing allocations over the next 12 months and believed there were some "exciting investment opportunities opening up" on the market.

Preqin interviews with investors showed many remain committed to the asset class and expected to weather the storm and capitalise on a market upturn whenever it occurred.

Only 7 per cent of investors polled said they would be decreasing allocations, citing poor returns and a lack of transparency as the key factors in this decision.

Some investors reported they would no longer be investing in fund of funds vehicles as they did not believe they were "value for money" because of the double layer of fees.