Public pensions top list of $1-billion-plus hedge fund investors

Public pension funds remain the largest contributors to hedge funds among institutional investors that allocate $1 billion or more to the vehicles, according to a new report.

Preqin Ltd., New York, published this finding in “Hedge Fund Spotlight May 2013.” Preqin’s Hedge Fund Investor Profiles service contains 176 profiles for investors with more than $1 billion invested in hedge funds (excluding fund of hedge funds managers). These investors represent more than $550 billion in combined capital allocated to hedge funds.

Public pension funds account for 29 percent of the capital allocated to hedge funds among $1 billion-plus hedge fund investors, the report shows. Private sector pension funds account for an additional 15 percent of market share.

“Most of [the] public pension funds are based in North America, with the largest public investors currently allocating more than $10 billion to hedge funds,” the report states. “Private sector pension funds also represent a significant 15 percent of total capital, and this investor group has the highest number of investors (43) with $1bn or more allocated to hedge funds.”

The market shares of other (capital-weighted) $1 billion-plus investors break down as follows in the report:

12 percent—wealth managers

12 percent—asset managers

9 percent—endowment plans