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Investment Consultants in Hedge Funds – June 2013

by Claire McNeil

  • 04 Jun 2013
  • HF

Seventy-four percent of the investment consultants tracked by Preqin provide services in the hedge fund space. The majority (68%) of consulting firms providing hedge fund advice are located in North America, predominantly in the US; only five are based in Canada. Europe is the second most common region for consultants in hedge funds to be headquartered, home to 26% of consultants; this figure comprises mainly UK-based (41%) and Switzerland-based (26%) consulting firms. Outside of North America and Europe, Australia and South Africa are the most common headquarter locations.

The regions viewed by alternatives investment consultants as providing the best opportunities in hedge funds have seen relatively notable changes since 2012. North America is still viewed by the greatest proportion (83%) of consultants as presenting the best opportunities in hedge funds; however, this is a significant increase of fifteen percentage points in comparison to 2012. In contrast, Europe is now viewed by 39% of consultants as presenting the best hedge fund opportunities, while this figure stood at 68% in 2012. Asia is regarded as presenting the best opportunities in hedge funds by 41% of consultants, a small decrease from last year’s proportion of 45%.

South America and the Middle East are still viewed by the smallest proportion of consultants as presenting hedge fund opportunities, although they have seen minor proportional increases. At present, 27% of consultants view South America as presenting the best opportunities, which is more than double the 13% in 2012. In 2012, only 3% of consultants selected Middle East as presenting the best opportunities in hedge funds; in 2013, this figure has risen to 10%.

Both hedge fund managers and investors are concerned about the impact of changing regulation in 2013, including the Dodd Frank Act and the European AIFMD (Alternative Investment Fund Managers Directive), with supervision, registration and the task of compliance likely to increase. Going forward, it will be interesting to see whether regulatory conditions and the changing economic climate in Europe and North America continue to spur the interest in Asia, South America and Middle East for hedge fund investment consultants.

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