Over recent weeks, several large institutional investors have announced that they are looking to add emerging market hedge funds to their investment portfolios, in order to capitalise to strong investment opportunities in these regions. This group includes the CHF 1.8 billion Hyposwiss Private Bank, which will be looking to invest in directional emerging market hedge funds as well as distressed and credit managers over the next 12 months. Trafalgar House Pension Trust, the UK private sector pension fund, has also announced plans to add emerging market hedge funds to its portfolio in 2010. The pension fund will be focusing on equity strategies, and although it will not invest in first-time funds, it will be considering emerging market managers that have spun-out from an existing fund management company.
As investor confidence has returned to the asset class and investors are once again looking to the investment opportunities that emerging market funds have to offer, we have witnessed a sharp rise in the number of institutional investors with an open mandate for hedge funds investing in these regions. Today, Preqin tracks 418 institutional investors with an active interest in emerging market strategies, an increase of 62% over the past twelve months.
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