Hedge fund assets will reach an all-time high this year, driven by increased institutional participation, according to Deutsche Bank’s 10th annual Alternative Investment Survey, released last week.
Following are survey highlights:
- Investors predicted continued growth, with an estimated net inflow of $140 billion in 2012, taking industry assets under management to a record high of $2.3 trillion by year-end.
- Institutions are driving growth and now account for approximately two-thirds of hedge fund assets, compared with less than one-fifth in 2003.
- Industry consolidation will continue, and big, successful funds will grow even bigger. Forty-four percent of respondents said they were invested in $1 billion-plus managers, up from 25% in 2009. Nearly a third planned to allocate to managers with more than $1 billion under management.
- Eighty percent of respondents ranked performance as one of the five most important factors in manager selection, as investors remain committed to seeking talented, top-performing managers irrespective of size.
Some 400 investor entities worldwide, representing $1.4 trillion in hedge fund assets, took part in the Deutsche Bank survey, which was conducted in December.