WEST PALM BEACH, FL (www.hedgeco.net) – US Pension Fund managers, endowments and other institutional investors may be adding about $250 billion to hedge fund management vehicles by the year 2008.According to a new survey conducted by the Bank of New York, and Consultant Casey, Quirk & Acito, half of the total of new money invested with hedge fund managers in 2003 were from theinstitutional managers. The new study suggested that as growing numbers of institutional investors continue to seek refuge in hedge funds, they could add up to $300 billion of new assets into hedgefunds by 2008.
Hedge Fund assets of Instructional investors in hedge funds have seen a steady increase over the years. However currently, wealthy investor�s still account for the greater portion of institutional assets invested with hedge fund managers. The study shows that the institutional money flowing into hedge funds are catching up with those of wealthy investors, to the point that by 2008, their assets will account for about half of the total of assets managed by hedge fund managers.
Endowments and Foundations have been the most active investors within the institutional investment sector, representing about forty percent of the total of assets invested by the institutional investor group in hedge funds. Institutional money flowing into hedge funds began nearly five years ago when the decline in equities began. Prior to that there was no institutional money invested with hedge fund managers. Part of the reason being that traditionally, institutional managers have played it safe, investing their funds in relatively conservative investment vehicles such as blue chip stocks and government bonds.
Such investment philosophy began to change in late nineties when the troubles of the technology sector began. One of the first US pension fund managers to invest with hedge funds was the California Public Employees Retirement System. Since CalPERS move significant number of US institutional funds have devoted increasing percentages of their portfolios into hedge funds. Such trend is predicted by analysts to be continuing in the near future.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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