Hedge funds are elbowing into the mainstream marketplace at an accelerated pace, bringing new products to market and driving asset growth.
A Deutsche Bank study released Monday showed that the percentage of participating investors allocating to liquid alternatives had jumped from 28% to 51% year on year.
Some three-quarters of alternative undertakings for collective investment in transferable securities directives (UCITS) investors and nearly two-thirds of investors into alternative ‘40 Act mutual funds planned to increase their allocations.
The study surveyed 212 investor entities worldwide, managing more than $804 billion in hedge fund assets, and 86 global hedge fund managers representing $6 trillion in firm-wide assets.
According to Deutsche Bank, alternative mutual funds have grown by 38% annually since 2008, compared with 13% for the hedge fund industry and 9% for the U.S. mutual fund industry.
Alternative UCITS assets have grown by more than 40% annually during this period, while the wider European UCITS industry by only 2%.
“The growth of liquid alternatives is a very real opportunity for investors who have previously been unable to access hedge fund strategies to do so in a liquid and regulated structure,” Daniel Caplan, European head of global prime finance at Deutsche Bank, said in a statement.
Liquid alternative investments have experienced a compound annual growth rate of around 40% since the 2008 financial crisis, making them the fastest growing segment of the asset management industry.