Much as in the U.S., small investors in Europe and Asia are flocking to hedge funds through windows such as hedge funds-of-funds and publicly traded investment firms that invest in hedge funds, The Wall Street Journal reports.
In the past year, even with a minimum investment of a mere few thousand dollars, such instruments have raised billions of dollars.
More of these funds, aimed at retail investors, are being brought to market, typically with minimum investments of $6,000 or less. European and Asian hedge funds typically require no less than $100,000 to invest.
Europe’s retail hedge fund market grew 32% in 2006 to $216 billion, according to FERI Fund Market.
“Retail investors have embraced hedge funds for the same reasons pension funds, institutions and high-net-worth individuals have,” said Omar Kodmani, senior executive officer at Permal Group, which manages $29 billion in hedge funds-of-funds. “It’s a diversification strategy and a way of accessing talented managers.”