Institutional #investor allocations into #HedgeFunds will rise in 2012

SEI’s fifth annual global survey of institutional hedge fund investors has confirmed investments into hedge funds will continue to rise, pointing out that “in the hedge fund space there is a history of returns benefiting investors which recognise emerging opportunities earlier than the rest”

Hedge fund strategies set to benefit most are long/short equity, event-driven, and credit (purer strategies with less potential hidden risk).

For first time since 2008, hedge fund performance was highlighted as more a more important challenge than transparency.

Prioritising absolute return is one thing, but hedge funds need to know what the true return objectives and tolerance for risk amongst investors is…i.e. What are the trade offs between risk and reward? How strategies are expected to perform in different market conditions?

SEI challenges hedge funds to demonstrate exactly how their strategies and methods are enhancing their clients’ risk-adjusted portfolio returns. Hedge funds must avoid losses and improve risk management methods and infrastructure.

Investors are crying out to hear strategies more clearly explained. “Investors heightened concern with performance gives fund managers a compelling reason to thoroughly explain strategies and processes they are using to generate returns”

SEI will be joining USD 3 trillion worth of institutional investors at the 13th Hedge Funds World Middle East, 5th-8th March 2012.