Hedge fund assets set to rise; Asian investment in focus
NEW YORK – Hedge fund investments are set to surge 28 percent in 2006, driven by inflows from Asia and the Middle East, according to a survey released Thursday by Goldman Sachs.Investors expect to see the greatest capital increase in global macro and equity long/short strategies.Of the 467 investor groups polled by Goldman Sachs in its sixth annual survey of the industry, those in Asia, excluding Japan, expect the highest growth rate of hedge fund investment at 40 percent. Middle Eastern and Japan follow with expected growth rates of 34 percent each.The survey identified a number of trends – notably the increasing acceptance of longer lock-up periods with respondents’ exposure to funds which tie up their money for one year or more up to 19 percent in 2005, from 14 percent in 2004.Over the year, equity long/short and event-driven strategies saw the largest annual increase in allocation accounting for 41 percent and 13 percent respectively of total investment in hedge funds, up from 36 percent and 8 percent in 2004.On the flip side, investors cut their exposure to convertible bond strategies, which now account for an average allocation of just 3 percent, down from a peak of 12 percent in 2003.The proportion of investors expecting hedge funds to increase fees has fallen for the first time in three years, down to 11 percent from 24 percent, and almost half of the investors polled think that funds of hedge funds will also decrease their fees over 2006, compared with just 36 percent expecting a decrease last year.Vail, Colorado
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