2009 has witnessed a surge of interest in event driven hedge funds and at Preqin we have recorded it as the fastest growing hedge fund strategy in terms of popularity since January. A large number of institutional investors, for example Hyposwiss Bank, Virginia Tech Foundation and Georgetown University Endowment have all informed us that they intend to look for event driven strategies to add to their hedge fund portfolios over the next six to 12 months. Many investors put their hedge fund investments on hold during 2008 and the early part of 2009, but are now once again allocating new capital to the hedge fund asset class and are choosing event driven funds as a means to capitalise on the opportunities that were created by the credit crunch and market volatility.
Event driven investments can be profitable but investors must be willing to accept some risk and therefore have the expertise to make sensible investment choices within the strategy. Fund of hedge funds with their experience as well as flexibility to allocate capital to new themes are the single largest group of investors which are active in event driven strategies. However endowments, public pension funds, family offices and foundations are also important sources of capital for the event driven manager.
Preqin currently holds profiles for 250 investors with an active interest in this sector, including 127 US-based institutions, 90 Europe-based and 33 based in Asia and Rest of World. For more information, please click here.