NEW YORK (HedgeWorld.com)–A survey of hedge fund managers by LJH Global Investments and Reuters suggests that new types of institutions increasingly are investing in hedge funds.
Historically, high-net-worth investors and fund of funds accounted for the lion’s share of hedge fund money, said LJH President James Hedges, speaking at a teleconference. He found that while this familiar base is still strong, allocations from other sorts of institutions are starting to pick up.
Managed account platforms, in particular, are investing in hedge funds. These are institutions that fall into the “other” category, said Mr. Hedges. A comparison of quarterly flows over the past few years shows that the share of this group is increasing steadily.
“We are convinced that there are new types of market interest,” he said. Some of the institutions are entering the market via novel structured products.
With respect to strategies, an ongoing trend over the past several months is a very strong capital inflow to the multi-arbitrage sector. Multi-arbitrage funds manage in a single portfolio a range of instruments, including convertible bonds, fixed income, high yield and distressed securities.