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Hedge funds expected to profit from strong investor inflows, says new study

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Hedge funds are strongly optimistic that they will see increased investor inflows over the next couple of years, according to new research from quant technology provider SigTech.

Hedge funds are strongly optimistic that they will see increased investor inflows over the next couple of years, according to new research from quant technology provider SigTech.

SigTech conducted a global survey of hedge funds with $194 billion in assets under management collectively. Some 83% of respondents expect institutional investors to increase their allocation to hedge fund strategies over the next two years, with nearly one in four (23%) expecting a dramatic increase.
 
The primary reason identified for institutional investors increasing allocation to hedge funds over the next five years was the expectation that they can generate absolute returns in any market environment. The research further found investors believe hedge fund strategies play an important role in mitigating certain risks and improving overall portfolio diversification.
 
A key factor in attracting flows from institutional investors is the level of transparency of the investment process employed by a hedge fund. A total of 90% of survey respondents identified this as an important issue.
 
The report also highlights that 94% of managers believe that access to high-quality data and cutting-edge tech is key to generating alpha, while 85% anticipate a rise in the trading of digital asset, and 95% expect an increased use of quant analytics by discretionary managers.

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