Preferred Hedge Fund Strategies of Europe-Based Wealth Managers – November 2014

by Joshua Snow

  • 17 Nov 2014
  • HF

Preqin data shows that there are 123 wealth managers domiciled in Western Europe and the Nordic states that are active investors in the hedge fund asset class. The chart below outlines the preferred hedge fund strategies of these wealth managers. The strategies are largely in line with the overall market consensus for the asset class, as outlined in the Preqin Investor Outlook: Alternative Assets H2 2014. Almost half (47%) of these wealth managers are actively seeking hedge funds that invest in long/short equity, due to its ability to minimize market exposure. Similarly, macro funds (35%) and managed futures/CTAs (31%) are common choices because of their capacity to return independently of the direction of capital markets. Equity market neutral strategies also seem to be becoming more attractive to private wealth investment firms for risk mitigation purposes: 10% of wealth managers on Preqin Hedge Fund Investor Profiles now consider it an integral part of their hedge fund investment strategy.  

Quilvest Wealth Management is one wealth manager that recently told Preqin about its preferences and plans for the hedge funds asset class. The Luxembourg-based firm, which provides wealth planning and investment solutions for high-net worth families and individuals, has total assets of $850mn, and a hedge fund portfolio of approximately $130mn. Its bespoke fund of hedge funds investment program offers an exposure to the asset class of 10-15% for each client portfolio and diversifies across all major hedge fund strategies, including macro and long/short strategies. The wealth manager will typically commit between $1mn and $25mn per hedge fund vehicle.

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