Over the first quarter of 2010 there has been a marked increase in interest in hedge funds by institutional investors. Several investors have indicated that they are searching for new managers over 2010, including the USD 76 billion Taiwanese insurance company, Cathay Life Insurance, which is actively searching for event driven and credit managers to add to its portfolio over the next 12 months.
Other investors are switching strategy. Stichting Pensioenfonds Stork has redeemed all of its holdings in funds of funds and is now searching for direct managers – particularly those in the CTA and macro space to add to its holdings.
There have also been several institutional investors which have made their first investments in hedge funds or set an initial allocation to the asset class in the first few months of this year. Powys County Council Pension Fund is currently reviewing a shortlist of 25 managers for its maiden foray into hedge fund investment. This coupled with a number of existing institutional investors increasing their allocation to the asset class is resulting in a wave of new capital flowing into asset class over the rest of the year.
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