Institutional investors expect more troubled times. The hedge fund investment vehicle is just right for you.
Hedge funds do not have a particularly good reputation in public. With institutional investors such as pension funds or foundations, they can make an important contribution to the return. Large investors do not want to do without them in the second half of the year. According to a survey by the Swiss bank Credit Suisse among 160 institutional investors, they now want to increase their positions in the asset class more than in any other segment.
Net investor demand, the percentage of respondents who increased their hedge fund allocations minus the percentage who reduced them, was at 32 percent the highest in at least five years. “Given the performance of the portfolio managers and the observed greater diversification of returns, this is an environment in which hedge funds can shine and stand out from the crowd,” said Joseph Gasparro, head of Americas Capital Services Content at Credit Suisse for many hedge funds at Building up capital helps. The incredible increase in stocks from late March to early June is unlikely to be repeated, Gasparro said. The future environment will bring more uncertainties. And in order to “navigate through this phase, investors rely on hedge funds.”
Hedge funds have largely held their ground in the phase of the spread of the coronavirus. By May of this year, they are down around five percent, which roughly corresponds to the development of the broad S&P 500 total return index. After two months of net returns, the industry saw inflows again in May. “In March and April, we saw investors tend to be the managers they knew best and most trusted to navigate through this phase,” said Melissa Toma Ryan, co-director of the Americas Capital Services Group at Credit Suisse.
In May and June, the bank surveyed investors with $ 450 billion in hedge fund investments as part of its semi-annual survey. What the survey also showed: 65 percent of investors said that their existing hedge fund positions met or exceeded their return expectations for the year to May. 81 percent said they preferred to invest money with managers whose funds are currently in their portfolio
(“Die Presse”, print edition, July 5th, 2020)