Hedge Funds: Investors Gain Interest in Hedge Funds Amid Pandemic

Investors now plan to put more cash into hedge funds rather than less.  This has not occurred in years.  For instance, a survey by Preqin showed that 44 percent of hedge fund investors plan to invest in hedge funds in the next year.  This is double from last year.  On the other hand, 28 percent of hedge fund investors plan to decrease their hedge fund investments.  Clearly, more investors are planning on raising their hedge fund investments rather than downsizing them.  One explanation for this is the volatility of today’s market.  

Private debt is another alternative investment that saw an increase in investment.  48 percent of surveyed investors plan to invest in private debt.  Ironically, half of surveyed investors disapproved of their hedge fund managers’ performance.  Only six percent claimed that their portfolios exceeded their expectations.  More investors, however, expect hedge funds to perform stronger than other asset classes in the future.  

Private equity funds are expected to perform worse, according to investors.  According to a statement by Preqin, “Investors believe the most positive prospects are in hedge funds…should be seen in the context of the industry’s disappointing performance over the past 12 months.”