The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Investors hang up on hedge funds

Despite the continuing weakness of equity markets, institutional investment in hedge funds has grown only slowly.

Investors on hold with hedge funds

With equity markets worldwide losing over a fifth of their value last year, bringing further pain and anxiety to institutional and private investors, hedge funds attracted renewed attention and scrutiny. Was this the time for mainstream investors finally to embrace them, or would it be better to harden resistance to their allure?

A sceptical view seemed to have some support - plenty of hedge funds closed down in 2002. At the same time, though, some hedge funds with simple and clearly logical strategies, such as dedicated short-bias equity funds, returned between 15.84% and 18.14%. That compares with -23.37% for the S&P500. Yet the interest shown by institutional investors in such funds has been more cautiously curious than enthusiastic.

In many cases institutional investors met hedge fund managers but left with their money in their pockets. "There's been a lot more talk than action," says Andrew Raisman, associate director for UK institutional business at Baring Asset Management. "For a lot of pension funds it's a case of 'we've got so much else to worry about so why look at hedge funds now?'"

Even after many consultants recommended a 5% to 10% allocation to hedge funds, most institutions left without taking out their wallets except to pay their consultants.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree