Hedge funds and Private Equity - PES

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Institutional investors
Current and forecast mean strategic allocations to hedge funds
12%
10%
8%
6%
4%
2%
0%
2,5%
2001
7,1%
7,7%
North America Europe Japan
Source: Russel Research
9,1%
1,7%
2003 2005 2007 Forecast
Taking the 2005 Russell Survey on Alternative Investing as a proxy for institutional investors’
behaviour we estimate the allocated capital to hedge funds ranges from 5% to 8%, with differences
from country to country. This may be underestimating the real size, due to higher
investments from pension funds in FOHF. European investors are currently the least exposed to
hedge funds and Japanese the most. In all areas since 2001 the allocation has grown impressively
at percentage increases ranging from +80% in Japan to +212% in Europe. The medium
term trend is oriented toward a further exposure to hedge funds at growth rates ranging from
+18% (Japan) to +40% (Europe) in three years time.
Institutional investors
Hedge Fund Investment Structure – % of Allocated Capital
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
4%
61%
35%
3,6%
5,3%
7,2%
74%
26%
4,5%
North America Europe
7,1%
8,1%
Single Funds Funds of Funds Internally managed
Source: Russel Research
11,4%