Wealthy investors are far less willing to commit money to fledgling hedge funds, preferring to place money with veteran players instead, although as a whole they are more upbeat about prospects for the sector, according to Credit Suisse in a new survey.

Investors are also far more demanding when it comes to having relatively high levels of liquidity, a sign of how people are wary of long fund lockups after many funds restricted large pullouts from funds amid the financial turmoil a year ago.

“Investors are open to new launches, but discriminating: 65 per cent of investors could allocate “day one” to a new launch of a carved-out strategy within an existing firm, whereas only 28 per cent of investors could allocate similarly early to a manager starting an entirely new venture with no explicit track record," the survey found.

The survey, which was compiled by Credit Suisse’s Prime Services business, aggregates the views of a diversified cross-section of hedge fund investors, including pension funds, consultants, family offices and funds of hedge funds.

One area where managers and investors agree is general optimism about the growth prospects for the hedge fund industry this year. Hedge fund investors estimate that the industry will grow from an estimated $1.64 trillion at the end of 2009 to $1.97 trillion by the end of the year, which is above the pre-crisis peak and almost identical to the year-end forecast from managers.

The report said investors intend to increase their own hedge fund allocations by an asset-weighted average of 9 per cent of their current levels, which is $148 billion if extrapolated across the industry, implying expectations that performance will account for roughly 11 per cent growth in industry size this year.

The two most popular hedge fund strategies this year being Global Macro (67 per cent of investors increasing allocations), which had also been in pole position one year ago, and Event-Driven strategies (62 per cent of investors increasing allocations), which had a net outflow forecast a year ago, but has been one of the most talked about strategies in 2010.