Hedge Funds Are Embracing Smaller Funds
Institutions and public pensions funds continue to warm up to hedge funds. According to Preqin, 32 percent of its universe of 2700 investors plan to invest in additional hedge funds over the next 12 months. Of those looking for single manager funds, a significant majority figures to plunk down their money with the smallest funds.
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Institutions and public pensions funds continue to warm up to hedge funds.
According to London-based data research firm Preqin, 32 percent of its universe of 2700 investors plan to invest in additional hedge funds over the next 12 months. They figure to allocate at least $125 billion but as much as $195 billion.
A majority of them are looking to give money to funds of funds. Of those looking for single manager funds, a significant majority figures to plunk down their money with the smallest funds.
On the surface, these findings are somewhat surprising. Afterall, less than three years ago the survival of funds of funds — known for mediocre performance and relatively high fees — was called into question in the wake of the global financial meltdown, when many of them suffered performance and liquidity problems.....