By overwhelming numbers, respondents to our most recent InvestorForum survey see the regulatory landscape shifting drastically for hedge funds, mirroring what is being expressed anecdotally across the industry (see “ Jekyll, Hyde and Timothy Geithner ”). Survey results also suggest broad expectations that consolidation will be significant, that hedge funds will recover from last year’s decline and that the industry as a whole will resume its growth trajectory.
What type of institution do you represent?
Corporate pension fund 26.4%
Endowment 43.1
Foundation 2.8
Public pension fund 26.4
Taft-Hartley pension fund 1.4
What is the size of your fund?
More than $5 billion 30.0%
$2.5 billion to $5 billion 27.1
$1 billion to $2.49 billion 12.9
$500 million to $999 million 12.9
$100 million to $499 million 11.4
Less than $100 million 5.7
Do you currently invest in hedge funds or funds of hedge funds?
Yes 67.6%
No 32.4
If you answered no, are you considering investing in hedge funds?
Yes 9.1%
No 90.9
If you do invest in hedge funds, how big is your allocation?
More than 50 percent 7.1%
26 to 50 percent 11.9
16 to 25 percent 14.3
11 to 15 percent 11.9
6 to 10 percent 19.0
Less than 6 percent 35.7
According to Chicago-based Hedge Fund Research, the hedge fund industry had about $1.5 trillion in assets under management at the end of 2008. What do you think the total will be one year from now?
More than $2 trillion 1.6%
$1.5 trillion to $2 trillion 19.7
$1 trillion to $1.49 trillion 42.6
$500 billion to $999 billion 32.8
Less than $500 billion 3.3
What do you think the total will be five years from now?
More than $3 trillion 5.6%
$2 trillion to $3 trillion 24.1
$1.5 trillion to $1.9 trillion 38.9
$1 trillion and $1.49 trillion 20.4
$500 billion to $999 billion 7.4
Less than $500 billion 3.7
What percentage of hedge funds will close during the next year?
51 to 75 percent 1.8%
26 to 50 percent 40.4
11 to 25 percent 49.1
10 percent or less 8.8
How many of the world’s 100 biggest hedge fund firms (as defined by the Alpha Hedge Fund 100) will be around in five years?
More than 90 percent 29.8%
About 75 percent 40.4
About 50 percent 22.8
About 25 percent 7.0
During the next five years, will pension plans, foundations and endowments change their allocations to hedge funds?
Yes, they will increase their allocations. 28.6%
Yes, they will decrease their allocations. 46.0
No, they will keep their allocations about the same. 25.4
During the next five years, will institutional investors continue to use funds of hedge funds to invest in hedge funds?
Yes 89.6%
No 10.4
During the next few years, will there be drastic regulatory changes in the U.S. (beyond mandatory hedge fund registration) that will have an impact on the way hedge fund managers operate?
Yes 80.9%
No 19.1
Note: Responses may not total 100 percent because of rounding.
