Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Hedge Fund Clients Say Industry Assets to Reach $2.1 Trillion

Feb. 27 (Bloomberg) -- Global hedge-fund assets may rise 12 percent to $2.13 trillion by year-end as “challenging” market conditions prompt investors to stick with the industry even after many funds suffered losses in 2011, according to a survey by Credit Suisse Group AG.

The increase in assets is expected to come from positive investment performance and net inflows, the Zurich-based bank said in a statement today. Credit Suisse’s findings are based on a survey of more than 600 clients with about $1.04 trillion invested in hedge funds.

Europe’s sovereign debt crisis and concerns about slowing economic growth in the U.S. caused hedge funds to lose 5.2 percent on average in 2011, the second-worst annual return since Chicago-based Hedge Fund Research Inc. began tracking industry data in 1990. The performance hasn’t scared off pension funds and other investors, who still say hedge funds can provide protection from wide market swings, Credit Suisse said.

“Institutional investors remain positive on hedge funds and on the outlook for further industry growth,” Robert Leonard, Credit Suisse’s global head of hedge fund capital services, said in the statement. “They continue to look to hedge funds to generate uncorrelated returns and to reduce overall volatility within their portfolios.”

Last year’s performance has prompted investors to reduce their expectations for hedge funds, with clients predicting that funds on average will gain 8.6 percent in 2012. Respondents to the same survey released by Credit Suisse a year ago estimated hedge funds would rise 11 percent in 2011. In the year-ago survey, investors also erroneously predicted that hedge fund assets would rise to $2.3 trillion by the end of 2011.

Hedge funds investing in Asia and emerging markets are the most appealing to investors, according to this year’s survey.

So-called crowded trades, in which a number of hedge funds make similar investments, were cited as one of the biggest risks to the industry, Credit Suisse said. Other top concerns included the possibility of a sovereign default and counterparty risk, the survey found.

To contact the reporter on this story: Jesse Westbrook in 東京 at jwestbrook1@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.