Survey: Hedge Fund Allocations to Increase in 2012

Date: Thursday, February 16, 2012
Author: Alex Akesson, HedgeCo.Net

New York (HedgeCo.net) – A new survey by AlphaMetrix Global Marketplace found that a majority of investors in hedge funds, commodity trading advisors and private equity funds expect to increase their allocations to those private investments in 2012.

More than 250 managers representing more than $610 billion in assets under management and over 400 investors participated in the Summit. Overall, more than 200 total investors and managers participated in the survey.

A total of 65 percent of investors said they intend to increase their allocations to private investments by some degree this year, with 25 percent of participants planning to raise their allocations significantly. Further, 35 percent intend to leave their existing allocations unchanged.

Other highlights from the survey include:

• Some 41 percent of private investment managers and investors believe equities will be the best-performing asset class in 2012, while 26 percent expect commodities to outperform this year.
• The majority of respondents expect this year’s market volatility to remain at or above levels seen in 2011: This includes 49 percent who expect volatility in 2012 to be similar to last year, and 14 percent who expect much higher volatility in 2012.
• Thirty percent of managers and investors responding expected 2012 to see a decrease in volatility relative to 2011.

Eurozone Outlook

• Half of all survey participants believe that the European Union’s periphery nations will break off, while the core nations will remain part of the Eurozone; 8 percent expect the Eurozone countries to revert fully to their respective national currencies.
• Nearly 80 percent of respondents expect at least one country in Europe to default on its debt in 2012. Of those investors and managers who named a specific country, 80 percent expect Greece to default this year.

Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net