Credit Suisse today releases its 9th annual Hedge Fund Investor Survey entitled "Shifting Tides," in which responses from over 320 institutional investors representing $1.3 trillion of hedge fund investments, were analyzed on a number of topics including:

• Key industry trends and forecasts
• Growth and return prospects for the industry
• Strategy preference and allocations plans

Key highlights from the 2017 Credit Suisse Annual Hedge Fund Investor Survey:

• Overall sentiment was positive for hedge fund industry growth with investors forecasting a 3.5% increase in new inflows during 2017. Even as the industry begins 2017 at an all-time high for AUM of $3.018Tn. 

• Investors appear to be making real headway in the push for better alignment of terms, with 61% of respondents reporting that they had at least one manager in their portfolio with a hurdle rate, while 57% said their management fees were lowered in the past 12 months.

• Global Macro-Discretionary was specified by investors as the most preferred strategy for 2017 with 26% net demand. Fixed Income Arbitrage/Relative Value, with 18% net demand, was ranked #2 in demand strategy by investors. Emerging Markets-Equity rounded was #3, also with 18% net demand.   

Robert Leonard, MD and Global Head of Capital Services at Credit Suisse, said:

"Institutional investors remain strongly committed to hedge funds playing a role in their portfolios. However, they also appear to be following through and making real changes to their hedge fund allocations. This includes increased concentration with funds in their portfolios, adding strategies that are less correlated with equities and terms/structures that better align their long-term interests with those of their managers."

 

"Importantly, after years of discussion, it appears that there is now real progress being made by institutional investors and hedge fund managers in finding an equitable middle ground. While still an ongoing dialogue, it is nevertheless encouraging and a positive sign for the hedge fund industry going forward."

[Click link below for other findings from the Survey.]