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Credit Suisse Releases Mid-Year Survey of Hedge Fund Investor Sentiment

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Credit Suisse Releases Mid-Year Survey of Hedge Fund Investor Sentiment

PR Newswire

NEW YORK, Aug. 7, 2018 /PRNewswire/ -- Credit Suisse today released its Mid-Year Survey of Hedge Fund Investor Sentiment, entitled "Back In The Saddle", which polled over 275 institutional investors globally representing $1.04 trillion in hedge fund investments. Participants were surveyed on a number of topics, including key industry trends and forecasts, as well as strategy preferences and allocation plans for the second half of the year.

** For a copy of the complete survey, please click here.

Key highlights from the 2018 Credit Suisse Mid-Year Survey of Hedge Fund Investor Sentiment:

  • Investor Appetite for Hedge Funds Remains Strong Hedge Funds witnessed the largest positive swing in net demand among the different asset classes we surveyed and are on par as the top investment strategy of allocators going into the second half of the year. 
  • Momentum of Non-Traditional Products Investors continue to show increasing preference for employing alternative investment vehicles in addition to commingled accounts. Most favored structures include Separately Managed Accounts/Funds of One, Co-Investments, Private Credit, and Longer Lock products. 
  • Focus on Fund Expenses Allocators indicated more attention should be given to pass through fees. Approximately 25% of investors moved certain fund expenses to the manager over the past two years.
  • Quantifying Alignment of Interests Fees & Terms (76%) and Fund Expenses (51%) are the topics investors are most focused on. With the ongoing dialogue between investors and managers now including more emphasis on pass through fees, quantifying the total cost of running a hedge fund and supporting it with benchmarking could help create an optimal alignment of interests.

Joseph Gasparro, who leads Strategic Advisory and Content for Credit Suisse Capital Services, said:

"Investors continue to have increased appetite for hedge funds driven by a variety of factors, including more aligned fees and terms as well as the broader use of customized solutions and non-traditional vehicles, especially Managed Accounts and Co-Investments."

Jaynita Sodhi, Co-Head of U.S. Credit Suisse Capital Services, commented:

"We saw a large upswing in demand for Discretionary Macro among investors surveyed, as volatility returned to the markets. As we witnessed going into 2018, equities remain top of mind for allocators. Also notable is the inclusion of ESG as a top strategy preference."

Other findings from the Survey:

  • Strategy Preferences Discretionary Macro had the largest positive demand swing from year-end 2017 and was specified by investors as the most preferred strategy for the second half of 2018. Equities also remain in favor (5 of the top 10 strategies) with interest for a variety of approaches, including Equity Long/Short Healthcare and both Fundamental & Quantitative Market Neutral.
  • Environmental, Social and Governance (ESG) ESG made its top 10 strategy preference debut as allocator interest grows. 25% of investors currently have an allocation to the strategy.
  • Regional Focus The broader Asia-Pacific region and emerging markets are again most in demand. Although sentiment has decreased since the start of the year given the emergence of trade tensions, investors look at these regions as a longer-term opportunity. North America witnessed the largest positive demand swing as the U.S. economy and stock market continue their upward momentum in 2018.

About the Respondents
The survey covered institutional investors on a global basis, including pension funds, endowments, foundations, consultants, private banks, family offices, and funds of hedge funds. 57% of responses came from the Americas, while 31% were from EMEA-based investors and 12% were from APAC.

Credit Suisse AG
Credit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). Our strategy builds on Credit Suisse's core strengths: its position as a leading wealth manager, its specialist investment banking capabilities and its strong presence in our home market of Switzerland. We seek to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. Credit Suisse employs approximately 45,430 people. The registered shares (CSGN) of Credit Suisse AG's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.

Credit Suisse Prime Services
Credit Suisse Prime Services delivers outstanding core financing and operating services that hedge fund and institutional clients require, including start-up services, product access, high-touch client service, financing, access to sources of capital, risk management, and managed lending. Prime Services delivers the strengths of Credit Suisse's investment banking, private banking and asset management business to a focused number of clients. As a partner, Prime Services is committed to bridging the gap between idea and execution and ultimately functioning as the provider of choice for both the alternative and traditional investment communities. Credit Suisse Capital Services is part of Credit Suisse Prime Services and is responsible for introducing hedge fund managers to a broad range of institutional investors (including Funds of Hedge Funds, Family Offices, Private Banks, Endowments and Foundations, and Public and Corporate Pensions) who are seeking to allocate capital to Hedge Funds.

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SOURCE Credit Suisse

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