Survey says a quarter of HF investors have more confidence in hedge funds now than they did last year
Feb 16th, 2009 | Filed under: Institutional Investing, Today's Post
A few days ago, we noted that despite hedge funds having succumbed to the double-whammy of poor performance and scandal, institutional investors seems remarkably sanguine about their alternative investment portfolios. A survey by SEI and Greenwich found that two-thirds of institutions expected their hedge fund allocation to “stay the same” even by the time the survey was conducted in January – well into the great hedge fund draw down of last fall.
Sounds nuts, right? Well, now another survey seems to corroborate this finding. In fact, a survey of 50 institutional investors released last week by Preqin, a London-based consulting and research firm, found that half of respondents said the turbulence of the last 12 months has not affected their confidence in hedge funds and they are continuing to invest. If that isn’t surprising enough, the survey found that more than a quarter of respondents said their confidence had increased and they planned on increasing their allocations to hedge funds.
As you might guess if you read this website on a semi-regular basis, we’re not surprised by those whose confidence was unaffected. But we’re very curious about what occurred in the past 12 months that could have actually increased one’s confidence in any investment, let alone hedge funds. The snap survey was conducted only a few weeks ago, so unless the respondents had been at a Monastic retreat in Nepal or stuck on a South Pacific island with the cast from Lost, they would have had plenty of time to second guess their investment decisions over the past year. A measly 7% (1 in 14) said they were reducing their allocation to hedge funds (chart from report below). More…
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