25/03/2009

Investors expect 5-10% return for ‘09

The majority of investors expect their hedge fund portfolios to generate a 5-10% return this year but remain braced for an increase in industry-wide withdrawals, Deutsche Bank reported in its annual investor survey.

According to the study, which surveyed over 1,000 participants representing around $1.1trn in alternative assets, despite expectations that withdrawals in 2009 will top $200bn, investors were heartened by hedge fund performance relative to other asset classes.

Industry consolidation looks set to continue, with 50% of respondents reporting investment in hedge funds with an average AUM of between $800m and $4bn, leading Deutsche Bank to suggest that a “premier league” of hedge funds is emerging.

Redemptions remained the biggest concern for 82% of those polled, with transparency, risk management and liquidity among the key criteria for manager selection.

There was also a boost for managed account vendors with 43% of investors indicating that they would be more likely to use them in the future