US - Institutions are showing a steady stream of interest in investing in hedge funds, according to new research by industry tracking outfit Tass.
“Hedge fund flows are being favourably impacted by more institutional allocations. There continues to be a steady stream of interest from a variety of institutional investors who are looking for ways to allocate capital to strategies uncorrelated to the major markets,” says US-based Tass Research, part of Oppenheimer Funds’ Tremont Advisors, in its analysis of hedge fund industry in the third quarter.
It said investors added a net 6.8 billion dollars (6.8 billion euros) to hedge funds in the third quarter. “This brings the total net assets allocated to hedge funds this year through September 30 at just under 17 billion dollars,” it says.
Investors continued to favour long/short equity, fixed income arbitrage and event driven strategies, the report found. Long/short equity attracted the most net assets - 2.1 billion dollars. Event driven attracted 1.7 billion dollars and fixed income arbitrage gained 1.1 billion dollars.
“It was a good quarter for hedge funds as investors sought to allocate assets to strategies that would preserve capital better than long only strategies,” says Tremont’s chief investment officer Barry Colvin.
Elsewhere in the hedge fund analysis sector, ratings firm Standard and Poor’s announced that it is to launch a 40-fund hedge-fund index.