Global hedge funds

Our 8th annual survey of international hedge funds discovers the main focus associated with industry shifting to growth after 5 years of volatile circumstances. Because of the increased competition for possessions, managers are taking an array of routes to development.

Methodology

• 100 telephone interviews with hedge funds representing US$956b in possessions under administration
• 65 telephone interviews with institutional people representing US$1.3t in assets, with US$220b allocated to hedge funds
• Of the 65 respondents, 14 represented funds of funds and 51 represented retirement benefits or endowments

Supervisors with more than US$10b in assets under management (AUM) tend to be constantly establishing services, eg separately managed reports, fluid alternatives and long-only resources.

Investor desire for food appears strong for these new products. However, the generally reduced charge structures tend to be affecting margins.

Midsize and smaller managers, meanwhile, remain dedicated to increasing growth via existing choices to existing customers and through reaching brand-new people.

Resources of funds (FOFs) are evolving because they battle to keep their share of this marketplace through the use of authorized services and products. More than half of our FOF respondents offer liquid choices, products which count on sub-advisory relationships to achieve success.

Managing development

Supervisors must beware the herd mindset when it comes to a unique item launch. The global asset management industry can offer classes as to what takes place when new item development happens also rapidly.

In addition, to handle danger and target regulator objectives, it's important to possess right infrastructure and settings in place for new projects and items. As always, the main element concern is the obligation of managers to act as stewards for people. Greater alignment of interests between managers and people is a continuing quest.