The AIMA Investor Steering Committee (ISC), a committee of institutional investors that undertakes educational initiatives and provides practical guidance within AIMA, the global hedge fund industry association, has published a new paper on the evolving role of hedge funds in institutional investor portfolios.
The paper, ‘Beyond 60/40: The evolving role of hedge funds in institutional investor portfolios’, is based on a survey of some of the most important institutional investors in hedge funds globally. The respondents included North American, Asian and European pension funds, endowments, foundations and family offices, with combined assets of more than US$400 billion.
The main findings include:
• Institutional investors are moving away from the traditional 60% equities/40% bonds portfolio structure and increasingly using alternatives in general and hedge funds in particular as tools to customise their portfolios.
• Investors are using hedge funds to enable them to meet individual objectives in terms of risk-adjusted returns, diversification, lower correlations, lower volatility and downside protection.
• Hedge funds are increasingly regarded as a means to access opportunities and tailor portfolios, rather than as a separate asset class.
• Most investor-respondents have increased their allocations to hedge funds since the financial crisis, with most planning to continue to increase the size of their investments in the next few years.
To download the full report, click here.