Bloomberg – Christopher Bittman, head of the $1 billion University of Colorado Foundation, is committing more money to hedge funds even after the industry handed investors record losses last year.<\/p>\n
Bittman plans to add as much as $30 million to the private partnerships in 2009, lifting the foundation’s hedge-fund holdings to about 20 percent of assets because he expects them to hold up better than other investments in the global bear market.<\/p>\n
While Morgan Stanley estimates that clients may withdraw 20 percent of the $1.2 trillion they have in hedge funds this year, not everyone is running for the exits. Investors like Bittman are adding to their positions, focusing on funds that hold easy-to- trade assets like stocks and currencies. Others are adjusting their portfolios or changing managers to better survive.<\/p>\n
“Institutional investors are by no means through with hedge funds,” said David Holmes, a partner at Eager, Davis & Holmes, which tracks the hiring of money managers. “But it will be a bit slow for several quarters as investors rethink their investment goals and strategies.”<\/p>\n
Investors are adding new managers this year at about the same pace as they did in the fourth quarter, when nine institutions placed $582 million with hedge funds, according to the Louisville, Kentucky-based research firm. In the fourth quarter of 2007, 28 institutions invested $1 billion. <\/p>\n