Survey reveals over half of European institutions are “convinced non-investors” in hedge funds
Nov 29th, 2007 | Filed under: Hedge Fund Industry TrendsOn the heels of Deutsche Bank’s recent report “Alternative Investments In Perspective“, JP Morgan came out with a European perspective earlier this week called “Are Alternatives Mainstream?” (view full report). The two reports are similar in that they both cover the various pillars of “alternative investments” such as real estate, private equity, infrastructure, commodities and, of course, hedge funds.
JP Morgan’s headline number is 107 billion Euros. As in, European institutions will add 107 billion Euros to their alternative portfolios in the next “2-4 years” according to the firm’s survey of nearly 300 institutional investors. While that sounds impressive, only 17 billion of that will actually be in the form of hedge funds. With around 1.9 trillion in assets managed by the survey respondents, this amounts to an increase of around 1%. Not huge, but still considered a dramatic change for mega-pensions known for their glacier-like speed.
How will these investors spend their next 107 billion? Just the same way you and I would spend any old 107 billion. You know, some real estate, a few hedge funds, private equity…perhaps some commodities.
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Hi
Two small observations
In the UK pensions industry, it is more common for companies to use investment consultants than it is in almost any other country – partly to do with legislation and events (Myners in the early 00’s) Hence the disparity between the UK and other countries.
Secondly, Investment consultants are not doing quite as well as you may think in the UK. A few reasons:
Poor management (WW was a partnership, when this was removed a few people became very rich and most didn’t). All the other major ones have management issues.
LDI/Banks. Many highly qualified staff have left consulting and joined investment banks, for pension solutions teams. Others have joined asset management LDI teams given the requirement for actuarials skills there. There has been huge staff turnover in the industry for some years now.