Hedge Funds reaching new heights. Credit Suisse is pleased to announce the results of its annual Global Hedge Fund Investor Survey, in which we analyze responses from close to 550 institutional investors, representing $1.03 trillion of hedge fund investments, on a number of topics.
These include investors current views on the growth and return prospects for the hedge fund industry; their preference and allocations plans across various strategies and regions and their views on key new trends and developments in the industry. This year's survey also explored in closer detail preferences and investing trends amongst pensions and other institutional investors.
The title of this year’s survey, "Reaching New Heights", reflects optimism expressed by institutional investors towards the prospects for industry performance and growth during 2013. Robert Leonard, Managing Director and Global Head of Capital Services at Credit Suisse commented: “Institutional investors are clearly expressing more confidence in risk assets in this year’s survey and appear less worried about left tail risk events or macroeconomic uncertainty. Given the backdrop of effective central bank policies, lower political uncertainty and positive performance last year, it is not surprising to see increased expectations for 2013.”
When respondents were asked to forecast total industry assets at the end of 2013, the average prediction was US$2.42 trillion. This would represent an industry growth rate of over 10% or $220B, comprising of positive performance and new capital inflows. If correct, this would represent an all-time high for hedge fund industry assets under management by the end of this year.
Respondents shared their insights into which hedge fund strategies they anticipate allocating capital to during 2013:
In terms of regional preferences, Emerging Markets and Asia-Pacific regions remained in the top two spots, though they traded places from last year’s survey. This seems in keeping with investors’ stated increase in risk appetite. Investors also exhibited a very strong bounce back (26%) in demand for Developed Europe, as they appear to have taken comfort in some of the political actions taken there in the latter half of 2012.
When asked about their preference for hedge funds from a size standpoint, investors indicated that those managers running between $500M and $2B in assets under management were in the best position to be considered for future allocations.
The survey also uncovered a number of other key new industry trends and developments for 2013:
Mr. Leonard added: "We believe that pension funds represent a key element for the future growth of the hedge fund industry and therefore, wanted to take a deeper dive into the developing trends surrounding their investment preferences and requirements. We believe that this year’s survey provides some truly unique insights into those trends."
Not an offer or advice: The information expressed in this Media Release has been prepared for general information and is not an expression of opinion or recommendation by Credit Suisse or its any of its affiliates. It does not constitute financial advice and should not be relied on as such. It does not take into account an individual investor’s objectives, financial situation and needs which are necessary considerations before making any investment decision. It should not be relied upon in making investment decisions or by any other person for the purposes of investment advice.