GLOBAL - Hedge funds, particularly fund of funds, are still very much in favour with investors, according to a new survey, with over 50% of investors looking to up their allocation over 2002.
In its fifth annual hedge fund investor survey, the Hennessee Hedge Fund Advisory Group found that 54% of investors planned to increase their hedge fund allocation in the coming year, up from 45% in 2001.
According to the results, hedge funds met or exceeded expectations for 85% of hedge fund investors. The survey concluded that in addition to the 38% rise in industry assets, hedge funds were growing in use for portfolio diversification and downside risk protection.
Commenting, Elizabeth Lee Hennessee, chairman and founder of Hennessee Group, said: The performance of hedge funds in 2000 and 2001 has made it increasingly prudent to consider hedge funds as an investment alongside stocks and bonds.
Other key findings in the survey included:
-the largest investors in hedge funds are individuals and family offices, with 56% of the capital in the industry; - the greatest increase in hedge fund investments came from fund-of-funds, with a jump from 3% in the 2001 to 15%; - 40% of respondents intended to increase their fund-of-funds allocation in 2002. - 41% of investors used a consultant, up from 29% in the 2001- convertible arbitrage and merger arbitrage constituted the largest share of industry assets at 16%. Hennessee is a global hedge fund investment consulting firm advising individuals and institutions on over US$1bn in assets.
By Madhu Kalia
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