Industry Surveys

Hedge Funds Expand Asset Management Presence - Deutsche Bank Study

Sandra Kilhof, Reporter, London, 4 December 2013


Hedge funds are playing an increasingly expanding role in the asset management industry as institutional investors move away from traditional asset allocation, according to a new survey.

Hedge funds are playing an increasingly expanding role in
the asset management industry, according to a new survey by tag|Deutsche Bank">Deutsche Bank.

The report revealed how hedge funds have evolved to run
non-traditional products such as long-only and liquid alternative strategies to
meet new demand from institutional investors, who are moving away from
traditional asset allocation. As such, investors in favour of a risk-based
approach are incorporating hedge funds into their core portfolio rather than as
a separate alternatives allocation, it said.

The study surveyed more than 260 investors and managers, and
found that over half of investors allocate to non-traditional hedge fund
products, including 36 per cent who invest in hedge fund-run long only, and one
third investing in liquid alternatives operated by hedge fund managers. One
third of all investors increased their allocations to non-traditional hedge fund
products last year, and another 43 per cent on average plan to increase their
allocations over the next 12 months.

Similarly, half of manager respondents now run
non-traditional hedge fund products, and 48 per cent of those managers have
seen more than half of new business since 2008 directed towards non-traditional
hedge fund products, instead of traditional asset management products.

“An ever increasing number of hedge fund managers are
diversifying their product range as they seek to provide differentiated
solutions to institutional investors,” said Anita Nemes, global head of capital
introduction at Deutsche Bank.

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