Institutional Investors Increase Allocations In Hedge Funds

Institutional Investors Increase Allocations In Hedge Funds by MFA Blog

New survey data released by Deutsche Bank’s hedge fund capital group and Credit Suisse reflects the growing relationship between the hedge fund industry and institutional investors and the continued expansion of the industry despite ongoing market turbulence.

According to Deutsche Bank’s study, pension funds globally increased their allocation to hedge funds in 2015. Similarly, Credit Suisse’s annual Hedge Fund Investor Survey found that investors had a positive outlook for overall hedge fund growth in 2016.

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In Europe, pension fund allocations increased 3 percent, while North American pension funds increased their median allocations to 10 percent. Asia-Pacific funds’ allocations rose to 5 percent, a more than 50 percent increase from the previous year. Investors surveyed by Credit Suisse’s report estimate that the coming year will see a more than 3 percent increase in assets under management (AuM) and roughly 90 percent will either maintain or increase their allocations in 2016.

These allocations help play an important role in providing diversified, risk adjusted returns over time for investors – like the public and private pension funds, charitable foundations, university endowments and other institutional investors that make up approximately two-thirds of the hedge fund industry’s global assets under management. The data from these reports indicates continued growth of the hedge fund industry and the value CIOs believe alternative investments represent in helping universities, pension plans and other investors meet their financial goals.

Allocations in hedge funds