Digital Assets Report

Newsletter

Like this article?

Sign up to our free newsletter

Hedge fund allocations to increase in H2, says Preqin outlook report

Related Topics

Allocations to hedge funds are likely to increase in the second half of the year, while higher-risk venture capital and private equity allocations are likely to suffer, according to Preqin’s H2 2022 Investor Outlook report.

Allocations to hedge funds are likely to increase in the second half of the year, while higher-risk venture capital and private equity allocations are likely to suffer, according to Preqin’s H2 2022 Investor Outlook report.

In particular, Preqin expects macro, CTAs and relative value hedge funds to attract more flows. This is consistent with expectations of a softer fundraising environment for private equity and venture capital (PEVC) in the second half of the year. 

The report is based on a survey of more than 300 LPs, interviewed in June 2022, investing across alternative assets and assesses investor sentiment in ESG, private equity, venture capital, private debt, hedge funds, real estate, infrastructure, and natural resources. 

According to the report, investors expect private equity and venture capital near-term performance to face strong headwinds in the second half of the year, according to Preqin’s H2 2022 Investor Outlook report, with 50% and 55% of survey respondents expecting worse performance over the next 12 months, respectively. 

Venture capital valuations are of most concern, with 80% of investors viewing the asset class as overvalued. As markets come under pressure, the highest risk asset classes such as private equity and venture capital are expected to be impacted the most. The recent summer rally in stock markets may provide some relief, but it remains to be seen if it constitutes a structural change in direction.

Like this article? Sign up to our free newsletter

Most Popular

Further Reading

Featured