Investments in hedge funds will grow by 28% in 2006 due to inflows from Asia and the Mideast, according to a survey released by
Investors believe that global macro and equity long and short strategies will deliver the most stellar returns. Investors in Asia, ex-Japan, expect hedge fund investments to grow by 40% this year. And the Mideast and Japan have expected growth rates of 34% each.
The survey also identified new trends among hedge funds, such as longer lock-up periods with respondents' exposure to funds, which tie up their money for a year or more.
This past year, equity and long and short event-driven strategies had the biggest annual increase in allocation (41%), amounting to 13% total investments in hedge funds (13%), up from a 36% increase in allocations and 8% in total investments in 2004.
Also, the number of investors who feel that hedge fund fees will increase has actually dropped for the first time in three years, amounting to 11%, down from 24% in 2004.