Survey Shows Investors Are Pleased With Hedge Funds

July 6, 2004 ( - Nearly nine out of 10 (88%) hedge fund investors said their holdings have met or exceeded their expectations.

The popularity of these vehicles is evident based upon their growth.   Last year alone, the hedge fund industry experienced a 34% growth rate, bringing industry assets up to $795 billion.   Since the beginning of 2000, hedge funds have grown 145%, according to the 7 th Annual Hennessee Hedge Fund Investor Survey.

Most popular among hedge fund holdings were distressed funds, held in 63% of hedge fund portfolios.   Other popular methodologies were event driven (56%) and convertible arbitrage (55%).   To determine which hedge fund investments are most suitable, 49% of hedge fund investors use a formal allocation process – compared to 62% of hedge fund investors using such a process for their traditional investments.   Additionally, 42% use a consultant for their hedge fund investments.  

Hedge fund investors are also poised to increase their allocations.   More than six out of 10 (62%) endowments that invest in hedge funds expect to increase their hedge fund allocation.

More information about the survey can be obtained by contacting Alexander Smith-Ryland of the Hennessee Group at (212) 857-4444.