Hedge fund investors are expected to increase or maintain their allocations, according to hedge fund advisor Hennessee Group.
Of the 94 hedge fund investors surveyed, 93% said that they would increase or maintain their allocation. Ninety-one percent reported that hedge funds either met or outdid their expectations.
The average portfolio of hedge fund investments is comprised of 13 hedge funds, which is a drastic increase from an average portfolio of three hedge funds when investors first began investing in the asset class.
The survey revealed that investors who invested in a hedge fund directly, as opposed to a hedge fund-of-funds, saw better returns because the average hedge fund portfolio performed better than the average hedge fund-of-funds by about 4%.
"Investors are becoming far more comfortable with hedge funds as an asset class," said Elizabeth Lee Hennessee, founder of Hennessee Group. "We believe it is becoming common practice to consider hedge funds within a stock and bond allocation."
The survey also showed that the use of consultants has become more common, as 38% of those surveyed confirmed they used one, a 52% increase from the 2000 survey, Hennessee said.
Institutional money allocated to hedge funds - which now makes up $1 trillion - is predicted to increase.
Those polled included high-net-worth individuals, pension funds, endowments and hedge funds-of-funds.