Institutional allocations to hedge funds trend upwards despite performance woes

Wed Apr 4, 2012



Industry survey season predicts significant fresh investments by year-end


By Susan Barreto

Anita Nemes
Robert Leonard
Optimism thrives just as hedge fund returns are beginning to nudge into positive territory following their abysmal performance in 2011. Investors holding on to cash are expected to abandon the sidelines and come back to an industry that has proven itself among institutional investors despite nagging losses and failure to reach high water marks, according to the first-quarter round of annual investor surveys from Deutsche Bank, Credit Suisse, SEI, NACUBO-Commonfund and bFinance.

Last year, InvestHedge tracked on average roughly $1.4 billion a month flowing into hedge funds, even as a flood of redemptions were making things tough on funds of hedge funds and, to a lesser degree, on single-manager hedge funds that had also been under-performing or at the centre of SEC investigations.

According to Deutsche Bank Global Prime Finance's annual survey of investors, investors will will see the hedge fund industry reach...

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