Hedge fund managers will be able to access new capital sources over the next 12 months as 80% of investors are at least considering investing with new managers, the latest Preqin research reveals.
Furthermore, 38% of investors are planning to increase the amount of capital they invest in hedge funds over the coming 12 months, meaning capital inflows are likely to increase throughout the industry.
In a study conducted for the 2012 Preqin Hedge Fund Investor Review, 10% of investors stated that they plan to invest only with new managers in the next year, while 49% intend to seek new relationships alongside maintaining those they already have. An additional 21% are looking at new proposals opportunistically.
The study found just 9% of investors plan to reduce the amount of capital they invest in hedge funds during 2012, while 40% of investors were dissatisfied with returns produced by their hedge fund investments in 2011.
One-fifth stated that they had more confidence in hedge funds now than they did in 2010, while 66% stated that they felt the same level of confidence, while 38% of investors are seeking long/short equity investments, making it the most popular strategy.
Some 26% are seeking global macro hedge funds and 79% intend to invest directly in hedge funds, while the proportion of investors planning to invest in commingled funds of hedge funds has fallen significantly in the past 12 months from 42% to 24%.
A total of 15% of institutions looking to make investments in the next 12 months prefer their capital to be held in separately managed accounts.
Firm track record is the most important criterion for an investor when choosing a fund manager, followed by fund performance and strategy.
