SubscribeInstitutional Hedge Fund Investors
SEI recently completed a survey of institutional investors and their perspective on hedge funds. 100 institutions were surveyed and 47 were currently invested in hedge funds. Even the ones who were investing in hedge funds had extra due diligence steps to ensure that each allocation to a hedge fund manager is done in a deliberate and cautious fashion.
Top 5 Factors Institutional Investors Look For In Hedge Funds
- Reporting & Transparency (85% of institutional hedge fund investors reported that they would not invest in a strategy they did not understand)
- Institutional Quality Infrastructure and Operations (54% of institutional investors pointed out that better managed firms return higher performance)
- People. Build stable hedge fund management teams at all levels
- Shift away from focusing exclusively on performance to investment disciplines
- Moderate to High Performance
The white paper where this information came from concludes by stating: The take-away message is that institutions clearly prefer to do business with institutional-style organizations,†concluded Schaeffer. “For hedge funds, the challenge will be to fit the profile of an institutional-quality fund while preserving the performance attributes that attracted major investors in the first place.â€
by Richard Wilson, hedge fund consultant and writer
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