NEW YORK, March 6, 2018 /PRNewswire/ -- Credit
Suisse released its Tenth Annual Global Hedge Fund Investor Survey
today, entitled Great Expectations, in which responses from 345
institutional investors representing $1.1
trillion of hedge fund investments, were analyzed on a
number of topics including:
- Key industry trends and forecasts
- Growth and return prospects for the industry
- Strategy preference and allocations plans
Key highlights from the 2018 Credit Suisse Annual Global
Hedge Fund Investor Survey:
- 74% of Institutional Investors indicated that
their hedge fund portfolios met or exceeded their return
expectations during 2017. This is a significant increase from the
previous year, when only 30% of investors were satisfied with the
performance from their hedge funds allocations.
- Strong Appetite for Equity Focused Strategies in 2018 (8
out of the top 10 strategies), with investors indicating strong
interest for a variety of equity focused approaches. This includes
Emerging Markets Equity (33%), Fundamental Equity Long/Short (20%),
Quantitative Market Neutral (19%) and Equity Long/Short Sector
funds (Healthcare, Financials &
TMT).
- More Diverse Array of Fee Structures are being offered
to investors than ever before, with 76% of investors taking
advantage of options such as early stage discounts from new
launches, reduced fees for longer lock-ups, sliding fee schedules
based on fund AuM, large ticket discounts and hurdle rates or other
types of customized terms.
Robert Leonard, Managing Director
and Global Head of Capital Services at Credit Suisse, said:
"Last year hedge funds had strong performance and also continued
to improve the alignment of interests between themselves and their
investors. Accordingly, as we begin 2018, the vast majority of
institutional investors appear pleased with the contributions from
their hedge fund portfolios. In fact, the number of investors who
indicated that their hedge fund allocations met or exceeded their
expectations more than doubled from last year, which is a very
positive development for the industry."
Other findings from the Survey included:
- Target Returns: For the third straight year, investors
increased the target return expectations for their hedge fund
portfolios. Investors now expect to realize returns of 8.53% during
2018 from their hedge fund allocations, up from 7.25% expected
returns in 2017.
- Regional Focus: Investor interest in APAC (50%),
Emerging Markets (39%) and EMEA (32%) topped the regional focus
list, as allocators continue to search for value. Conversely, net
demand for North American markets was relatively flat, as investors
appear to be comfortable with their current allocations to the
region.
- Factors for Selecting Hedge Funds: Risk Management
capabilities (63%) topped the list as the single most important
factor that investors utilize when evaluating hedge funds for
potential allocations. In addition, they also indicated that Team
Pedigree (60%) and Outperformance of Passive Benchmarks (48%) are
other key factors in their decision making process.
- Overall Investor Sentiment: Was positive for the hedge
fund industry, with respondents forecasting 5.4% growth in assets
under management during 2018. This, as the industry begins the year
at an all-time high for assets under management of $3.21T.
- New Launches: Investors remain constructive on the new
launch environment, with 63% of all respondents indicating that
they had allocated to a newly launched fund last year. Fund of
funds (80%) and family offices (65%) were the most likely to have
invested in a start-up hedge fund, while pension funds (27%) were
the least likely investor segment to do so.
- Alternate Structures: Investors indicated appetite for
utilizing a wide range of structures in addition to commingled
accounts, including managed account formats, opportunities for
co-investment, risk premia strategies, long-only funds and
UCITS. One of the strongest areas for growth has been
co-investment opportunities, with 30% of investors participating in
such investments last year, versus only 9% in 2009.
- Significant Developments in 2018: When asked about
potentially significant developments that might occur this year,
investors forecast the ongoing realignment of fees/terms, increased
volatility, hedge fund outperformance, the continued rise of
Artificial Intelligence driven & Cryptocurrency focused
strategies, as well as industry consolidation (by number of
funds).
The survey, produced by Credit Suisse's Hedge Fund Capital
Services Group, is one of the most comprehensive and longest
running in the industry—focused on pension funds, endowments,
foundations, consultants, private banks, family offices and funds
of hedge funds—and with respondents diversified across all global
regions.
** For a copy of the complete survey, please click here.
Credit Suisse AG
Credit Suisse AG is one of the
world's leading financial services providers and is part of the
Credit Suisse group of companies (referred to here as 'Credit
Suisse'). As an integrated bank, Credit Suisse offers clients its
combined expertise in the areas of private banking, investment
banking and asset management. Credit Suisse provides advisory
services, comprehensive solutions and innovative products to
companies, institutional clients and high-net-worth private clients
globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in
Zurich and operates in over 50
countries worldwide. The group employs approximately 46,840 people.
The registered shares (CSGN) of Credit Suisse's parent company,
Credit Suisse Group AG, are listed in Switzerland and, in the form of American
Depositary Shares (CS), in New
York. Further information about Credit Suisse can be found
at www.credit-suisse.com.
Credit Suisse Prime Services
Credit Suisse Prime
Services delivers outstanding core financing and operating services
that hedge fund and institutional clients require, including
start-up services, product access, high-touch client service,
financing, access to sources of capital, risk management, and
managed lending. Prime Services delivers the strengths of Credit
Suisse's investment banking, private banking and asset management
business to a focused number of clients. As a partner, Prime
Services is committed to bridging the gap between idea and
execution and ultimately functioning as the provider of choice for
both the alternative and traditional investment communities. Credit
Suisse Capital Services is part of Credit Suisse Prime Services and
is responsible for introducing hedge fund managers to a broad range
of institutional investors (including Funds of Hedge Funds, Family
Offices, Private Banks, Endowments and Foundations, and Public and
Corporate Pensions) who are seeking to allocate capital to Hedge
Funds.
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SOURCE Credit Suisse AG