Surge in regulated hedge fund sales as investors seek safety

 
Michael Bow
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HEDGE fund managers offering less risky funds to investors have been rewarded with a surge in the new business, a poll shows.

The study, from Deutsche Bank, reveals nearly half of hedge fund managers sell so-called non-traditional hedge funds, which are regulated, have lower fees and offer more liquidity for investors.

Of these, almost half of their new business sales since 2008 have come from the sale of the funds, underscoring a surge in demand from investors for non-traditional products. “An ever increasing number of hedge fund managers are diversifying their product range as they seek to provide differentiated solutions to institutional investors,” said Deutsche Bank analyst Anita Nemes.

The study, which polled 60 hedge fund managers around the world, also found lower fees were further down the list of reasons why investors allocate to non-traditional funds.

Just 16 per cent said fees were the reason they invested in the funds, with 53 per cent saying they valued the increased liquidity.