Industry Analysis

Institutional allocations to hedge funds trend upwards despite performance woes

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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