Most Hedge Investors Dissatisfied with Funds
Jan 11th, 2007 | Filed under: Hedge Fund Industry TrendsBy: Riva Froymovich, Investment News
Published: January 11, 2007
We are fans of Investment News, but take issue with this characterization of the Deutsche Bank hedge fund survey released yesterday. Here’s the survey itself and here’s why you need to read it before forming your own opinion:
First and foremost, approximately half of survey respondents were funds of hedge funds. So when the report says, “73% of investors worldwide report that they have had difficulty finding managers that live up to their expectations”, it may very well be refering to disgruntled fund of funds managers who lost out on their own 10% performance fee due to the modest, but not spectacular performance of their managers. (We don’t know because the data is not broken down by investor type).
Average initial allocation to hedge funds rose 50% over 2005. This is indeed a surprise since, according to Investment News, most investors “were dissatisfied with (their) funds”.
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