Institutions tell pollsters “more fees”, “more consultants” and “more funds of funds”
Jul 27th, 2008 | Filed under: Institutional InvestingWhen Man Investments recently wrote that “FoHF [Funds of hedge funds] have been and will continue to be an integral part of hedge fund investing” (see related posting), they weren’t kidding. A survey released by IPE and Invesco this week seems to indicate that funds of hedge funds now have a market penetration of 100% among European institutions. In other words, every survey respondent that invests in hedge funds uses funds of funds for at least part of their portfolio (see chart below from their report).
Not surprisingly, the survey finds that equity-based hedge fund strategies fell out of favour, big time, amongst the European institutions canvassed. But with many respondents using a mixture of funds of funds and single strategies, it’s difficult to determine if investors actually moved money from one to the others. Suffice to say, funds of funds may not be falling out of favour after all (as some have suggested - see related posting).
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