Articles By Topic
By Topic: Surveys
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From Vol. 6 No.23 (Jun. 6, 2013)
TheCityUK Report Discusses Trends in Hedge Fund Manager Locations, Fund Domiciles, Performance, Strategies, Investors, Secondary Market Transactions and Service Providers
TheCityUK (TCUK), an association of representatives from the U.K. financial services sector and other businesses, recently released a report providing an overview of recent trends in the global hedge fund industry, broken down by geography, with a focus on the role of managers and funds based in the U.K. Specifically, the report provided a geographical breakdown of funds and managers; a snapshot of fund performance and investment strategies; a synopsis of fund manager concerns; recent information on secondary market transactions in hedge fund interests; and perspectives on the use of hedge fund service providers. This article summarizes the primary insights from the report.
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From Vol. 6 No.17 (Apr. 25, 2013)
Infovest21 Survey Reveals Hedge Fund Manager Perspectives on Top Concerns, Business Changes, Staffing, Investor Allocations, Fund Terms, Fees and Portfolio Composition
Infovest21, LLC, which provides information services for the hedge fund industry, recently released a report detailing the findings from a survey of small, medium-sized and large hedge fund managers. Survey respondents offered their thoughts on recent changes in their businesses; staffing; investor composition; portfolio composition; product composition; popular investment strategies; fund terms; and drivers for investor allocation decisions. This article highlights the key findings detailed in the report.
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From Vol. 6 No.16 (Apr. 18, 2013)
Recent Survey Reveals Hedge Fund Professionals’ Perspectives on the Prevalence of and Pressures to Engage in Unethical Conduct and Illegal Activity in the Hedge Fund Industry
A recent survey of hedge fund professionals asked respondents various questions to understand their views on the need for and prevalence of unethical conduct or illegal activity (together, misconduct) at their own firms and among their competitors; any temptations or pressure to engage in misconduct; their firms’ likely responses to misconduct; and the SEC’s effectiveness in stamping out misconduct. The survey results were broken down into various demographic categories, including the respondents’ gender, 2012 earnings and years of work experience, as well as their firms’ assets under management. This article summarizes key findings from the survey.
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From Vol. 6 No.15 (Apr. 11, 2013)
SEI Study Offers a Reality Check to Hedge Fund Managers on What Actually Works When Marketing to Institutional Investors
Financial and asset management services provider SEI has released its sixth annual survey of institutional hedge fund investors. While hedge fund investors are “generally maintaining, and even somewhat increasing,” their hedge fund allocations, SEI cites “rising investor dissatisfaction” with hedge fund performance, which, going forward, could be further hindered by the “institutionalization” of the hedge fund space in response to more intensive investor due diligence and greater demands for transparency. Moreover, as the line between hedge funds and other products offering hedge fund strategies continues to blur, it becomes more difficult for managers to distinguish their funds and convince investors that they offer good value. See “How Can Hedge Fund Managers Organize and Operate Alternative Mutual Funds to Access Retail Capital (Part Two of Two),” The Hedge Fund Law Report, Vol. 6, No. 6 (Feb. 7, 2013). This article summarizes key points from the survey. For more on the expectations of fund managers and investors, see “Ernst & Young’s Sixth Annual Global Hedge Fund Survey Highlights Continued Divergence of Expectations between Managers and Investors,” The Hedge Fund Law Report, Vol. 5, No. 44 (Nov. 21, 2012). For a general look at institutional investors’ priorities and perspectives on alternative investments, see “Natixis Global Asset Management Survey Reveals Institutional Investors’ Attitudes Towards Market Volatility, Risk Management, Portfolio Construction, Investment Concerns, Alternative Investments and Investment Priorities,” The Hedge Fund Law Report, Vol. 5, No. 42 (Nov. 9, 2012).
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From Vol. 6 No.15 (Apr. 11, 2013)
Seward & Kissel Study of New Hedge Fund Launches Identifies Trends in Preferred Investment Strategies, Fees, Liquidity Terms, Fund Structures and Strategic Capital Arrangements
The challenging capital raising environment has not deterred quality managers from launching their maiden funds. With this in mind, Seward & Kissel LLP recently published a study detailing some key findings relating to first funds launched in 2012 by their U.S.-based manager clients. The study highlights important information concerning investment strategies, management fees, incentive fees, liquidity terms, fund structures and strategic capital arrangements. This article summarizes important takeaways from the study. For a discussion of the 2011 version of Seward’s study, see “Seward & Kissel Study Highlights Trends in Hedge Fund Investment Strategies, Fee and Liquidity Terms, Fund Structures and Strategic Capital for New Managers,” The Hedge Fund Law Report, Vol. 5, No. 8 (Feb. 23, 2012).
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From Vol. 6 No.14 (Apr. 4, 2013)
Why and How Do Corporate and Government Pension Plans, Endowments and Foundations Invest in Hedge Funds?
A growing proportion of the capital flowing into hedge funds is coming from institutional investors. Therefore, hedge fund managers looking to raise capital effectively must understand the financial condition, motivations and allocation preferences of different institutional players. To help hedge fund managers develop and refine such an understanding, we have recently published a series of articles on institutional investor investment preferences, each focusing on a different category of investor. The first article in the series focused on family offices. See “Why and How Do Family Offices and Foundations Invest in Hedge Funds?,” The Hedge Fund Law Report, Vol. 6, No. 1 (Jan. 3, 2013). The second article in the series focused on sovereign wealth funds. See “Why and How Do Sovereign Wealth Funds Invest in Hedge Funds?,” The Hedge Fund Law Report, Vol. 6, No. 13 (Mar. 28, 2013). This article, as the title implies, focuses on corporate and government pension plans, endowments and foundations. See also “The Four P’s of Marketing by Hedge Fund Managers to Pension Plan Managers in the Post-Placement Agent Era: Philosophy, Process, People and Performance,” The Hedge Fund Law Report, Vol. 2, No. 45 (Nov. 11, 2009).
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From Vol. 6 No.11 (Mar. 14, 2013)
Credit Suisse Survey Reveals Allocation Preferences of Hedge Fund Investors, With Particular Attention on Preferences of Pension Funds and Insurance Companies
Credit Suisse AG recently released a survey covering institutional investor strategy and allocation preferences and return expectations for this year, as well as investors’ perspectives on topics such as fund fees, perceived risks and manager start-ups. The survey focused in particular on the perspectives of pension funds and insurance companies, because those investors are a primary source of growth in hedge fund assets under management. This article summarizes key findings from that survey.
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From Vol. 6 No.8 (Feb. 21, 2013)
Hedge Fund Manager Compensation Survey Addresses Employee Compensation Levels and Composition Across Job Titles and Firm Characteristics, Employee Ownership of Manager Equity and Hiring Trends
HedgeFundCompensationReport.com, a division of Job Search Digest, has published its 2013 Hedge Fund Compensation Report. Among other things, the Report provided a comprehensive look at compensation levels at hedge fund managers across job titles, by manager characteristics (including size, investment strategy and performance) and other criteria; composition of compensation; and employee compensation satisfaction levels. The Report also contained data addressing employee ownership of hedge fund managers’ equity; hiring trends; and employee concerns over job security. The Report generally revealed broad gains in average employee compensation for 2012. This article highlights selected takeaways from the Report.
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From Vol. 6 No.3 (Jan. 17, 2013)
Aksia Survey Reveals Hedge Fund Managers’ Perspectives on AUM Composition, Fees, Liquidity, Advertising Practices, Transparency, Reporting and High-Frequency Trading
Aksia LLC (Aksia), a specialist hedge fund research and portfolio advisory firm, recently released the results of its 2013 Hedge Fund Manager Survey (Survey), which covered two broad areas of inquiry: predictions for the world economy and the financial markets in 2013 and the state of the hedge fund industry. More specifically, with respect to economic and financial market issues, the Survey revealed hedge fund managers’ predictions concerning U.S. economic growth, unemployment and inflation; Chinese economic growth; Euro zone concerns; sources of economic concern for 2013; and market liquidity. With respect to hedge fund industry issues, the Survey revealed hedge fund managers’ perspectives on the composition of hedge fund assets under management; fund fees; fund liquidity; changes in advertising practices following passage of the Jumpstart Our Business Startups (JOBS) Act; fund transparency and reporting; and high-frequency trading. This article summarizes key findings from the Survey and compares some of the findings against those from a similar study conducted by Aksia one year ago. See “Aksia’s 2012 Hedge Fund Manager Survey Reveals Managers’ 2012 Predictions Regarding Tail Risk Hedges, Portfolio Transparency, Movement of Balances Away from Counterparties and More,” The Hedge Fund Law Report, Vol. 5, No. 2 (Jan. 12, 2012).
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From Vol. 6 No.1 (Jan. 3, 2013)
Why and How Do Family Offices and Foundations Invest in Hedge Funds?
Family offices and foundations are an important source of investment capital for hedge funds and funds of funds (together, funds), particularly funds whose managers have a track record, well-developed infrastructure and the ability to demonstrate staying power. See “Prime Broker Merlin Securities Develops Spectrum of Hedge Fund Investors; Event Hosted by Accounting Firm Marcum LLP Examines Marketing Implications of the Merlin Spectrum,” The Hedge Fund Law Report, Vol. 3, No. 39 (Oct. 8, 2010). However, family offices and foundations have specific objectives in investing in hedge funds and specific concerns with their hedge fund investments. Understanding these objectives and concerns is important to hedge fund managers because effective fund marketing should be a refined process rather than a blunt instrument. Marketing that raises long-term dollars invariably caters to the specific circumstances of an investor rather than generally (or only) touting the achievements of the manager. This is particularly true in marketing to family offices – entities that often have a range of objectives including but not limited to absolute returns. See “New Rothstein Kass Study Explains the ‘Consultative’ Approach to Marketing to Single-Family Offices and the Importance of That Approach for Smaller Hedge Fund Managers,” The Hedge Fund Law Report, Vol. 4, No. 20 (Jun. 17, 2011). To help hedge fund managers enrich their understanding of the goals and concerns of family offices and foundations, this article describes the pertinent findings from a December 2012 survey of family offices and foundations conducted by Infovest21. In particular, this article discusses the survey findings on topics including fund fees, allocation criteria, role of assets under management in manager selection, transparency and related topics.
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From Vol. 5 No.47 (Dec. 13, 2012)
Greenwich Associates and Johnson Associates Issue Report on Asset Management Compensation Trends in 2012
Greenwich Associates, an international research-based consulting firm in institutional financial services, in cooperation with Johnson Associates, Inc., a boutique financial services compensation consulting firm, have issued their 2012 U.S. Asset Management Compensation Report. The Report provides an overview of 2012 compensation levels and trends; discusses differences in compensation between portfolio managers, traders and analysts at hedge fund managers and other asset managers; considers the impact of new regulations on compensation; and discusses changes in compensation structures. This article summarizes key points from the Report. See also “Compensation Survey by Greenwich Associates and Johnson Associates Highlights Trends in Compensation and Best Practices for Hedge Fund Managers and Other Investment Professionals,” The Hedge Fund Law Report, Vol. 4, No. 46 (Dec. 21, 2011).
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From Vol. 5 No.44 (Nov. 21, 2012)
Ernst & Young’s Sixth Annual Global Hedge Fund Survey Highlights Continued Divergence of Expectations between Managers and Investors
On November 5, 2012, Ernst & Young released the results of its most recent annual global hedge fund survey, conducted in association with Greenwich Associates, in which one hundred of the world’s largest hedge fund managers and 50 major institutional investors representing $715 billion invested in hedge funds revealed their often differing views on topics of current interest to hedge fund industry participants. Topics covered by the survey included the effectiveness of hedge fund regulation; the alignment of fund manager compensation with risk and performance; manager selection and redemption criteria; regulatory, capital, technology and hiring expenditures; fund of funds; and Eurozone considerations. This article summarizes the key findings from the survey. See also “Ernst & Young’s Arthur Tully Talks in Depth with The Hedge Fund Law Report About Hedge Fund Governance, Succession Planning, Valuation, Form PF and Administrator Shadowing,” The Hedge Fund Law Report, Vol. 5, No. 11 (Mar. 16, 2012).
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From Vol. 5 No.42 (Nov. 9, 2012)
Natixis Global Asset Management Survey Reveals Institutional Investors’ Attitudes Towards Market Volatility, Risk Management, Portfolio Construction, Investment Concerns, Alternative Investments and Investment Priorities
On September 25, 2012, Natixis Global Asset Management, S.A. published the results of its survey of 482 large institutional investors from 13 countries to ascertain their views on various topics, including volatility in financial markets; approaches to risk management; alternative investments; sources of investment concerns; financial regulation; and investment priorities for the next 12 months. This article describes the survey results.
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From Vol. 5 No.36 (Sep. 20, 2012)
Preqin Study Reveals Institutional Investors’ Latest Views and Expectations on Hedge Fund Terms
Effective hedge fund marketing requires a thorough understanding of the target audience, which increasingly consists of institutional investors. To deepen the appreciation of hedge fund managers for the concerns, goals and expectations of institutional investors, alternative investment data firm Preqin Ltd. recently published a study on institutional investors’ views on hedge fund fee terms, transparency, liquidity and other aspects of the manager-investor relationship. This article highlights the key findings of the study.
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From Vol. 5 No.35 (Sep. 13, 2012)
Greenwich Associates Report Shows Hedge Funds “Reasserting Themselves” in Trading in U.S. Fixed Income Markets
Greenwich Associates, LLC (Greenwich), has issued a report on trading volumes in the U.S. fixed income markets and the growing role that hedge funds play in those markets.
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From Vol. 5 No.34 (Sep. 6, 2012)
Report Finds Hedge Fund Assets Continued to Grow in First Half of 2012, Particularly for the Largest Single-Manager Hedge Funds
In August 2012, PerTrac, Inc. issued a semi-annual update to a full-year analysis of the composition and size of the single-manager hedge fund and fund of hedge funds industry.
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From Vol. 5 No.33 (Aug. 23, 2012)
Simplify, LLC Survey Highlights Market Trends and Preferences in the Growing Secondary Market for Trading in Hedge Fund Interests
Simplify, LLC has conducted a comprehensive survey of investor preferences and practices in connection with secondary market trading in hedge fund securities and other alternative investments. The survey covered a wide range of relevant topics, including the size of the market, the number of participants in the market, rationales for trading, timing, trade size, liquidity, sourcing, brokerage issues and transfer restrictions. This article summarizes the results of the survey.
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From Vol. 5 No.30 (Aug. 2, 2012)
Survey by Hedge Fund Administrator Tzur Management Highlights Growth and Characteristics of Israeli Hedge Fund Industry
According to a survey recently released by hedge fund administrator Tzur Management (Tzur), Israel’s financial services industry has experienced significant expansion in the past five years due to deregulation, securities and tax law reforms and structural changes in the institutional market. This growth has been accompanied by the emergence of a growing and evolving hedge fund industry. To gain insight into and guidance concerning the Israeli hedge fund industry, Tzur provided a questionnaire to more than half of Israel’s extant hedge fund managers, polling them on various aspects of their businesses and on their views on the industry. This article summarizes the key findings from the survey.
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From Vol. 5 No.29 (Jul. 26, 2012)
Corgentum Survey Illustrates the Views of Hedge Fund Investors on the Roles, Duties, Risks and Performance of Service Providers
Corgentum Consulting, LLC, a specialist consulting firm that performs operational due diligence reviews of fund managers, recently conducted a survey asking hedge fund investors five questions about their views on service providers, including questions concerning the functions provided by service providers and the risks associated with them. This article describes the survey findings.
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From Vol. 5 No.27 (Jul. 12, 2012)
Hedge Fund Insurance Benchmarking Survey Reveals Trends and Views Concerning Insurance Purchasing, Pricing, Coverage Limits, Frequency of Claims and Quality of Claims Service
As the risks of doing business for hedge fund managers have increased, many have carefully evaluated various types of liability insurance, with a particular focus on the coverage and pricing of such products. To assist hedge fund managers in understanding trends in the market for such insurance, enhancing risk management and discussing insurance coverage with fund investors, London-based insurance consultant and broker, Baronsmead, has released the results of its second annual hedge fund insurance benchmarking survey (survey). The survey asked hedge fund managers and insurers to answer questions concerning: purchasing decisions related to directors and officers insurance and professional indemnity insurance, often known as errors and omissions insurance; insurance premiums, frequency of claims and quality of claims service; and risks of doing business as a hedge fund manager. This article summarizes the key findings in the survey.
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From Vol. 5 No.25 (Jun. 21, 2012)
Citi Prime Finance Survey Predicts Hedge Fund Industry Assets Will Nearly Double by 2016 and Highlights Opportunities for Hedge Fund Managers to Grow Assets Under Management
Although hedge fund assets under management (AUM) appear to be on the upswing, many managers continue to struggle to raise and retain capital. It is more critical than ever for hedge fund managers to understand the mindset of institutional investors and to seize upon opportunities to grow their AUM. In that vein, in June 2012, Citi Prime Finance released its third annual survey of hedge fund industry professionals, entitled “Institutional Investment in Hedge Funds: Evolving Investor Portfolio Construction Drives Product Convergence” (survey). The survey provides valuable insight into the thinking of institutional investors (who are now the dominant allocator of capital to hedge funds) and other hedge fund industry professionals. The survey also highlights historical trends in hedge fund asset allocation; predicts sizeable growth in hedge fund AUM by 2016; and describes various opportunities for hedge fund managers to grow their AUM. This article summarizes the key business development takeaways from the survey.
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From Vol. 5 No.22 (May 31, 2012)
Rothstein Kass Report Discusses Marketing, Structuring, Tax, Leverage, Due Diligence, Hiring and Other Dominant Concerns for Hedge Fund Managers in a Competitive Capital Raising Environment
The 2012 version of Rothstein Kass’ annual hedge fund industry survey assessed manager sentiment and trends across a wide range of relevant areas, including: structuring and choice of entity; ownership and management of hedge fund firms by women and minorities; seeding; consolidation and chief business concerns among manager principals; use of leverage; the interaction among leverage, tax and capital raising; sources of capital and expectations with respect to investor sentiment; length of the due diligence process; fee and other concessions in exchange for investments; technology; lock-ups; outsourcing; gates; hiring expectations with respect to CCOs, CFOs and CTOs; family office conversions; investor qualification; and Form PF. This survey results were explained in a report (Report), which also included insight from Rothstein Kass principals. This article provides a detailed summary of the key points of the Report.
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From Vol. 5 No.21 (May 24, 2012)
Survey by AIMA and KPMG Identifies the Key Drivers of the Bifurcation of the Hedge Fund Industry Between Larger and Smaller Managers
Life is very different these days for larger and smaller hedge fund managers. As a general matter, larger managers can afford to be institutional. They have the resources (derived from fees) to invest in the people and process required to attract institutional capital, which generate more fees, which increase the manager’s ability to invest in infrastructure – a seemingly virtuous cycle for larger managers. Smaller managers, on the other hand, face roughly similar infrastructure expectations from potential institutional investors, but typically do not have the resources to invest in people and process at a level commensurate with their larger competitors. Or are they competitors? This is a fundamental question animating a recent report (Report) from the Alternative Investment Management Association and KPMG. The Report echoes the oft-cited sentiment that the hedge fund industry is institutionalizing. But the Report takes the discussion a step further by addressing the elements of institutionalization and the disparate impact of that process on managers of different sizes (measured by assets under management and headcount). The Report also discusses transparency, due diligence, sources of capital by geography, FATCA, competition among managers and collaboration among them. It is important for managers and investors to understand the drivers and consequences of institutionalization, and the Report advances the industry’s understanding on these topics. But the most novel and provocative findings of the Report relate to smaller managers. In particular, the Report identifies: an effective method whereby smaller managers can compete with larger managers via collaboration and emphasis on their competitive advantages; a specific channel of fund flows to smaller managers; and the geographic regions that smaller managers should be targeting in their capital raising.
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From Vol. 5 No.15 (Apr. 12, 2012)
IOSCO Announces Intention to Conduct Annual Surveys of Hedge Fund Managers Based on Updated Systemic Risk Data Categories
On March 22, 2012, the Technical Committee of the International Organization of Securities Commissions (IOSCO) published an updated list of categories of data to be used in connection with annual surveys of hedge fund managers by IOSCO’s Task Force on Unregulated Financial Entities. IOSCO conducted its first hedge fund survey in September 2010, soliciting information in categories publicly identified in February 2010. See “Does the IOSCO Hedge Fund Disclosure Template Foreshadow the Content of Hedge Fund and Hedge Fund Adviser Disclosures to be Required by the SEC?,” The Hedge Fund Law Report, Vol. 3, No. 15 (Apr. 16, 2010). IOSCO intends to conduct its second hedge fund survey in September 2012, and to conduct such surveys annually thereafter, each September. The September 2012 hedge fund survey will solicit information from hedge fund managers in at least the updated data categories. According to a press release, those categories incorporate “lessons learned [since February 2010] and recent legislative developments in the U.S. and Europe.” The stated purpose of the annual surveys is to “enable the collection of internationally consistent data which can be shared to facilitate international supervisory cooperation.” This article describes the ten categories of information in which IOSCO will solicit information, discusses the context and limits of the annual surveys and highlights questions raised by IOSCO’s announcement to conduct annual surveys.
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From Vol. 5 No.9 (Mar. 1, 2012)
SEI and Greenwich Associates Survey Identifies Institutional Investors’ Expectations With Respect to Hedge Fund Performance, Transparency and Liquidity
On February 22, 2012, SEI Knowledge Partnership and Greenwich Associates released the second installment of a two-part report summarizing the results of their September and October 2011 survey of hedge fund investors. For a detailed analysis of Part I, see “Survey by SEI and Greenwich Associates Highlights the Importance to Hedge Fund Investors of a Clearly Articulated, Comprehensible and Credible Value Proposition,” The Hedge Fund Law Report, Vol. 5, No. 4 (Jan. 26, 2012). The second installment, entitled “The Shifting Hedge Fund Landscape, Part II of II: The New Dynamics of Hedge Fund Competitiveness” (Report), details investors’ greatest concerns when investing in hedge funds as well as their hedge fund selection criteria and expectations. This article summarizes the findings of the Report and outlines the Report’s five key recommendations for hedge fund managers.
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From Vol. 5 No.8 (Feb. 23, 2012)
Seward & Kissel Study Highlights Trends in Hedge Fund Investment Strategies, Fee and Liquidity Terms, Fund Structures and Strategic Capital for New Managers
While the hedge fund industry continues to be plagued by a challenging capital raising environment, a number of new hedge fund managers were able to launch advisory firms within the past year. With that in mind, Seward & Kissel LLP conducted a survey (Seward Study) of their U.S. clients that launched hedge fund firms in 2011 to ascertain information about the hedge funds that they either launched in 2011 or are expected to launch in the first quarter of 2012. The Seward Study focused on the types of investment strategies employed by such funds; fee and liquidity terms; fund structures; and types of strategic capital investments. The Seward Study did not include new hedge funds launched by Seward clients that were managers with hedge fund businesses existing prior to 2011. Nonetheless, the authors of the Seward Study believe that the funds surveyed reflect approximately 60% of the new hedge fund start-ups for 2011. This article highlights the key findings of the Seward Study and provides additional insight as to what the data points represent in terms of hedge fund manager and investor preferences.
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From Vol. 5 No.4 (Jan. 26, 2012)
Survey by SEI and Greenwich Associates Highlights the Importance to Hedge Fund Investors of a Clearly Articulated, Comprehensible and Credible Value Proposition
In October 2011, SEI Knowledge Partnership (SEI) and Greenwich Associates conducted their fifth annual survey of institutional hedge fund investors. On January 25, 2012, they released a report summarizing part one of the results of that survey (Report), including current trends affecting the hedge fund industry, including institutional hedge fund allocations, objectives, performance and preferences in investment strategies and vehicles. The Report, entitled “The Shifting Hedge Fund Landscape, Part I of II: Institutions Put Fund Managers to the Test,” identifies a deepening commitment to hedge funds on the part of institutional investors, and foreshadows increased institutional allocations. At the same time, however, the Report finds that institutions keep creating new challenges and requirements for hedge fund managers. Notably, the Report also details what hedge fund managers must do in order to maintain investor confidence. Part two of the survey will explore investors’ chief concerns regarding hedge fund investing, as well as the continuing evolution of institutional standards for hedge fund evaluation, selection and monitoring. This article summarizes the findings of the Report and the key takeaways for hedge fund managers. See also “SEI Report Describes the Growth Opportunity for Hedge Fund Managers in Regulated Alternative Funds,” The Hedge Fund Law Report, Vol. 4, No. 44 (Dec. 8, 2011).
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From Vol. 5 No.2 (Jan. 12, 2012)
Aksia’s 2012 Hedge Fund Manager Survey Reveals Managers’ 2012 Predictions Regarding Tail Risk Hedges, Portfolio Transparency, Movement of Balances Away from Counterparties and More
In November 2011, Aksia LLC (Aksia), an independent hedge fund research and advisory firm, published its 2012 Hedge Fund Manager Survey (Survey) in which it solicited predictions for 2012 from 125 hedge fund managers managing approximately $800 billion in assets and employing various investment strategies. Thirty-eight percent of the respondents employ long-short equity strategies, 26% employ event-driven strategies, 18% employ relative value strategies and 18% employ tactical trading strategies. Among other things, the respondents made predictions about market and investment strategy performance, economic growth projections and various scenarios with respect to the European financial crisis. The respondents also shared their views on policymakers’ handling of the global financial crisis as well as the impact of market correlation and new financial regulations on their investment strategies. Notably, respondents opined on hedge fund industry specific practices, such as the use of hedges for tail risk, portfolio transparency, movement of balances away from counterparties and the availability of financing in 2011. This article summarizes the Survey’s findings.
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From Vol. 5 No.1 (Jan. 5, 2012)
Ernst & Young Survey Juxtaposes the Views of Hedge Fund Managers and Investors on Hedge Fund Succession Planning, Governance, Administration, Expense Pass-Throughs and Due Diligence
Ernst & Young (E&Y) recently released the 2011 edition of its annual hedge fund survey entitled, “Coming of Age: Global Hedge Fund Survey 2011” (Report). The Report conveys and compares the views of hedge fund managers and investors on topics including succession, independent board oversight, use of administrators, expense pass-throughs and due diligence. This article summarizes the more salient findings from the Report. One of the Report’s many interesting insights is that managers frequently receive little in the way of feedback when a potential investor declines an investment. The Report partially fills this “feedback gap” by offering generalized insight on what matters most to investors. For example, managers may be surprised to learn that the absence of a robust and reliable succession plan may have played as much or more of a role in a lost investment as performance or even operational issues. (The HFLR will be covering succession planning for hedge fund managers in an upcoming issue.) More generally, the depth of the disparity in perception between managers and investors on a range of topics, as found by the Report, is at times startling. The Report therefore offers a sobering reality check for both managers and investors. Both sides need one another, albeit for different reasons, and the lifecycle of an investment can be significantly more productive if expectations and assumptions are better aligned.
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From Vol. 4 No.36 (Oct. 13, 2011)
AsiaHedge Study Finds That a Growing Proportion of Hedge Funds with Asia-Focused Strategies are Managed From Asia
A September 2011 survey (Survey) by AsiaHedge Research uncovered data with respect to: assets under management (AUM) by Asia-based hedge fund managers and Asia-focused strategies; AUM trends; the composition of the investor base in Asia-focused funds; the evolving industry structure; the level of AUM in Asia-focused hedge funds managed from within the region versus from outside of the region; the amount of assets managed from various sub-regions in or focused on the region; and the top Asia-focused strategies by AUM. This article details the key points from the Study.
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From Vol. 4 No.18 (Jun. 1, 2011)
Rothstein Kass Survey Reveals Optimism on the Part of Hedge Fund Managers with Respect to Capital Raising, Talent Mobility, Seeding, Industry Consolidation, and In Other Areas
Rothstein Kass, the provider of audit, tax, accounting and advisory services to private investment funds and their advisers, recently released the results of a survey of 313 hedge fund managers conducted in January of this year. The survey provides market color on a wide range of relevant topics, and highlights the differing perceptions among larger and smaller managers. Topics covered by the survey include: registration; talent mobility; optimism among managers; seeding; hedge fund industry consolidation; where the next investment bubble will develop and when it will pop; leverage and liquidity; capital raising; family offices; technology; the role of consultants; fees; outsourcing; branding and communications; and anticipated areas of regulatory scrutiny. This article summarizes the salient findings of the survey on the foregoing topics, and elaborates on the survey findings with links to relevant articles published in The Hedge Fund Law Report.
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From Vol. 4 No.11 (Apr. 1, 2011)
Survey by SEI and Greenwich Associates Identifies the Primary Decision Factors and Concerns of Institutional Investors When Investing in Hedge Funds
A survey of 97 institutional investors and 14 investment consultants conducted by SEI Knowledge Partnership in collaboration with Greenwich Associates last October, and released earlier this year, identifies the hierarchy of considerations and concerns of institutional investors when investing in hedge funds. One notable finding of the survey – especially for a publication, like the HFLR, focused on regulation – is the view of most institutional investors with respect to regulation. That view is discussed in this article. In addition, this article discusses the survey’s findings on the following topics: statistics with respect to hedge fund returns, assets under management, launches and liquidations during the last three years; plans with respect to hedge fund allocations during 2011; objectives of institutional investors when investing in hedge funds; most significant challenges in hedge fund investing; experience with and perceptions of liquidity; the 16 factors that investors consider most important when selecting among managers; four key takeaways for hedge fund managers from the survey findings; breakdown of hedge fund allocations by institutional investor type; trends with respect to fees; the role of consultants; the success rate of negotiations on liquidity terms; and trends with respect to the resources dedicated by institutional investors and consultants to hedge fund due diligence and monitoring.
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From Vol. 3 No.4 (Jan. 27, 2010)
Survey Suggests that Institutional Investors in Hedge Funds Favor Online Investor Reporting Systems
On January 25, 2010, Netage Solutions, Inc. – a CRM software and online reporting systems provider for the alternative investment industry – announced the results of a survey covering 31 institutional investors, family offices and advisers. The survey, conducted in the fourth quarter of 2009, concluded that “limited partners and their advisers overwhelmingly agree that online reporting systems help increase transparency.”
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From Vol. 2 No.46 (Nov. 19, 2009)
Ernst & Young Survey Reveals Hedge Fund Industry Has “Weathered the Storm”
A new survey published by Ernst & Young, entitled “Global hedge fund survey: Weathering the storm” has concluded that the 2009 global downturn has forced hedge fund managers to respond swiftly and dramatically to the demands of investors. The survey, based on one hundred telephone interviews with the largest hedge funds in the United States, Europe and Asia, and representing roughly half the industry, found that significant changes to fund governance, administration and investor reporting over the last year has enhanced investor confidence without adding significant costs. The fund managers polled also observed the rapid improvements to transparency and governance as proof that the industry can effectively respond to the needs of investors. These observations stand in stark contrast to managers’ concerns regarding increased regulatory oversight, which they view as imprecise, of less utility to investors and overly expensive. This article details the survey findings and its analysis of the Draft EU Directive, and discusses implications for the hedge fund industry in the year to come.
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From Vol. 2 No.15 (Apr. 16, 2009)
State Street Hedge Fund Survey Shows that Institutional Investors Remain Committed to Increasing Hedge Fund Allocations in 2009
According to a recent study by institutional money manager State Street Corporation, although overall allocations to hedge funds have been in moderate decline, the majority of institutional investors intend to increase or maintain current hedge fund allocations over the next 12 months. The study, conducted in conjunction with the 2008 Global Absolute Return Congress, indicates that the turbulent financial markets of 2008 have not significantly affected institutional investors’ asset allocations. Indeed, three quarters of the investors surveyed, which included global public and government pensions, corporate pensions, endowments, foundations and insurance companies, reported that they do not plan to modify portfolio allocations. We provide a detailed overview of the study.
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From Vol. 2 No.12 (Mar. 25, 2009)
Survey Questions: What Do Hedge Fund Market Participants Think of the Public-Private Investment Program?
Subscribers to The Hedge Fund Law Report include many of the leading decision makers in the hedge fund industry. Accordingly, we would like to hear your views on participation in the PPIP, given what we know about it today, in the form of answers to questions in this survey. Assuming the responses remain relevant next week – given the pace of regulatory change, the current proposal could be moot by then – we will summarize the responses in the next issue of The Hedge Fund Law Report. Please e-mail responses to the Publisher at publisher@hflawreport.com. No names will be identified in our summary of responses, unless you affirmatively state that you wish to be identified (and even if you do, you will only be identified if the context warrants). We thank you in advance for participating in this survey, and we hope that our summary of responses helps clarify the debate over the appropriate structure of collaboration between the investment management industry and the government in working to unfreeze credit markets.
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