WEST PALM BEACH, FL (www.hedgeco.net) – Man’s head of sales management in Europe, Mark Chambers said that European Institutions needs to increase their hedge fund investments. According to Chambers,such institutions have been slow in implementing hedge fund investments; as a consequence the total amount devoted to hedge funds is not enough to enable those institutions to boost their returns.
Chambers told a Reuter�s correspondent, “We would take the view that unless you allocate more than 5 percent there will be little or no impact on portfolios.� He added, “allocations vary according to which region of the world you are in. A lot of institutions don’t allocate, but even of those who do, the average would probably be less than 5 percent.”
Chambers noted that lackluster returns in 2004 may serve to discourage some European Institutions from pursuing a more robust hedge fund investment strategy. He also said that in order for such investments �To make a significant difference to your portfolio I think your allocation has to be at 10 percent or more.�
According to published reports, hedge funds account for only one percent of institutional portfolios in Europe, such assets falls short of the over 15 percent devoted to hedge fund management in North America. Hedge funds are relatively new to European investors, and it appears that many of the institutions are still taking the go-slow approach.
Part of the problem stems from regulatory restrictions that have hampered rapid implementation of hedge fund strategies in much of Europe. While some European countries are beginning to open up to hedge funds, it remains to be seen whether such new laws will ultimately encourage more institutions to invest in hedge fund managed portfolios.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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