Majority Of Investors Are Happy With Hedge Fund Returns

by Carla Johnson, Investors Offshore.com

05 October 2005

The vast majority of hedge fund investors are satisfied with the performance of the asset class and intend to increase their allocations, according to a survey by the hedge fund advisor Hennessee Group.

The eighth annual Hennessee survey revealed that 93% of the 94 hedge fund investors polled, which included high net-worth individuals, family offices, endowments, pension funds and funds of hedge funds, intend to maintain or increase the amount of money they have invested in hedge funds, while 91% responded by observing that hedge fund returns have met or exceeded their expectations.

Those who have invested in single manager funds instead of multi-manager funds of hedge funds were generally the more satisfied, as the average single manager portfolio outperformed the average multi-manager portfolio by 4%, Hennessee said.

The survey found that investors are becoming more sophisticated in their hedge fund dealings, with the average single hedge fund portfolio now consisting of 13 funds. Also, almost three-quarters of the respondents evaluated their hedge fund investments at least on a quarterly basis, and some on a monthly basis.

The survey also found a continued increase in the use of consultants, with 38% of the respondents having used these services this year.

Commenting on the findings, Elizabeth Lee Hennessee, founder and Managing Principal of Hennessee Group LLC, observed that: "Investors are becoming far more comfortable with hedge funds as an asset class - we believe it is becoming common practice to consider hedge funds within a stock and bond allocation."

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