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Hedge fund GPs and LPs at odds over investment priorities, says SEI paper

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Hedge fund managers and investors don’t currently see eye-to-eye when it comes to investment priorities, according to a new paper published by SEI.

Back to the future, which is based on the findings of a Preqin survey of more than 160 hedge fund industry managers (GPs) and investors (LPs), reveals a ‘consistent disharmony’ between the two camps.

According to the survey, some 36% of LPs see decreased volatility as very important, while the exact same proportion of GPs don’t see it as important at all. LPs meanwhile, are over twice as concerned about portfolio leverage as GPs.

In addition, LPs are at least 30% more concerned about liquidity risk, exit strategy, access to managers, and portfolio transparency than GPs. 

And while fee structures have moved away from the traditional two and twenty default in recent years, there remains a huge over confidence on the part of managers that investors are happy with current arrangements with 87% of GPs believing that investors are mostly or completely satisfied when in fact only 38% of LPs are.

Click to read online or download the PDF – UK version or US version


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