Multistrategy products showing popularity

Multistrategy solutions were the hedge fund products most frequently requested by institutional investors during the past 12 months, according to a new report.

Cerulli Associates discloses this finding in “Alternative Products and Strategies: Identifying Enduring Opportunities in Complex Markets.” The report examines the retail and institutional alternative investment landscape, including product preferences, new product development plans, distribution strategies, client demand, plus organizational structure and staffing.

The report revealed that 78 percent of institutional investors requested multistrategy hedge fund products during the past year, a significantly higher percentage than requests for other solutions. Among them:

• Emerging markets — 56 percent;
• Long-short equity — 44 percent;
• Global macro: — 44 percent;
• Event-driven — 33 percent;
• Equity market neutral — 33 percent;
• Long-short-credit 22 percent;
• Global/emerging market debt — 22 percent;
• Managed futures — 22 percent;
• Structured credit — 22 percent.

“Multistrategy funds continue to be a significant part of the hedge fund industry,” the report stated. “These funds can offer institutional investors steady sources of return and reduced exposure to any one asset class or investment style, thus reducing portfolio volatility and providing diversification.

“This risk-mitigated diversification is appealing to the more conservative institutional investor.”