2012 Investor Outlook: Huge disparities, no shift to small funds

By Lawrence Delevingne

Wed Jan 18, 2012

Citi Private Bank, FRM, Liongate, Man Investments, Morgan Creek, Neuberger Berman, PAAMCO, Private Advisors, Silver Creek and others speak out about their 2012 investment plans.

Hedge fund investors entered 2012 generally averse to directional, long-biased strategies in favor of shorter term, specific investment opportunities, according to recent interviews conducted by AR.

As they plan their 2012 allocations, pension consultants and funds of funds predict continued market volatility, high correlations among securities and general uncertainty resulting from assorted macroeconomic factors. But they disagree wildly about which hedge fund strategies will fare best in such an environment.

With the exception of FRM, almost no one appears to be shifting their focus to smaller managers, despite the common talking point that some hedge funds had gotten too large for their own good, with their assets hindering their performance in 2011. Many investors already allocate to smaller managers and did not indicate any plans to shrink that exposure, but their disinterest in expanding it means smaller funds are likely to continue struggling to raise capital. For some strategies, including...

ISSN: 2151-1845 / CDC10004H

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