Americans most active hedge fund investors

By Special Correspondent

Posted  Saturday, August 18  2012 at  16:01

In Summary

• According to a new report by alternate asset research firm Preqin, North America is home to the most active institutional investors in the world who are eyeing the hedge fund space.
• In the next one year, up to 80 per cent of North American investors will be looking out for new funds, says report.
• Europe-based investors are also a worthwhile target for fundraising hedge fund managers, since the report states, 67 per cent of them said they would be looking to invest in the asset class.
• Africa, which is lumped together with Asia and the rest of the world, has investors with the least likelihood to invest in hedge funds — only 41 per cent interested.

Hedge funds seeking to raise capital in coming days stand a higher chance of netting commitments by focusing on investors from North America.

According to a new report by alternate asset research firm Preqin, North America is home to the most active institutional investors in the world who are eyeing the hedge fund space.

The report that concluded that investor interest in hedge funds still abounds globally, found that in the next one year, up to 80 per cent of North American investors will be looking out for new funds. It adds that a considerable amount of hedge fund capital comes from US-based institutions in particular.

Europe-based investors are also a worthwhile target for fundraising hedge fund managers, since the report states, 67 per cent of them said they would be looking to invest in the asset class.

Africa, which is lumped together with Asia and the rest of the world, has investors with the least likelihood to invest in hedge funds — only 41 per cent interested.

It identifies countries such as China and South Korea as potential source of capital, thanks to efforts towards gradually loosening regulations with regards to the hedge fund industry, which will allow fund managers to gain access to a wealth of investors within these previously untapped markets.

According to a study conducted by the firm, at least seven out of 10 institutional investors intend to make commitments to a hedge fund in the world.

This includes 79 per cent of family offices, 77 per cent of endowment funds and 70 per cent of public pension funds.

In what Preqin describes as “encouraging news,” these findings point towards a vote of confidence in the hedge fund industry by investors despite the prevailing difficult conditions for such funds interested in attracting the attention of institutional investors, those with long or short equity their strategy.

Macro hedge funds are also seen as attractive by investors looking to take advantage of geopolitical events, currency movements, inflation, and interest rate changes.