April 1, 2014

Hedge Funds' AUM Appetite Seen Growing

By John D'Antona Jr.

Hedge funds' assets under Mangement and their appetite for investments, including equities, is expected to grow this year.

These findings are part of a Credit Suisse's 6th Annual Hedge Fund Investor Survey, titled "Onwards and Upwards," in which over 500 respondents participated, representing $1.16 trillion of hedge fund investments. Robert Leonard, managing director and global head of capital services at Credit Suisse noted that having forecast the strong rate of growth in the hedge fund industry in 2013, institutional investors predicted hedge fund industry assets under management to grow even faster this year by an average of 12 percent, to reach an all-time high of $2.8 trillion, with an upper quartile forecast of $3 trillion. If accurate, he added, this updated forecast would mean at least an additional $300 billion for the industry in 2014, coming from both performance and new capital inflows.

Among the highlights from the Credit Suisse annual Hedge Fund Investor Survey were that positive momentum for Equity Long/Short continued for a second year as investors cite significant ongoing interest, pointing to an environment ripe for stock selection and higher dispersions of returns.

In terms of regional preferences, developed Europe (43%) and Japan (33%) were most favored. North American strategies also enjoyed a positive view from investors with 15% net demand, up marginally from the 2013 survey.

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