Hedge funds reported the largest positive swing in net demand among various asset classes, according to a survey by Credit Suisse.
The study, which surveyed over 275 institutional investors worldwide, revealed investors’ rising preference for non-traditional investment products in addition to commingled accounts. Most preferred structures were separately managed accounts/funds of one, co-investments, private credit, and longer lock products.
Credit Suisse Capital Services strategic advisory and content head Joseph Gasparro said: “Investors continue to have increased appetite for hedge funds driven by a variety of factors, including more aligned fees and terms as well as the broader use of customised solutions and non-traditional vehicles, especially Managed Accounts and Co-Investments.”
Of the investors polled, 76% were found focussed on fees and terms and 51% on fund expenses.
In terms of strategy preferences, discretionary macro emerged as the most preferred strategy for the second half of this year. Equities too remained popular among investors.
Also, ESG funds made their first top ten appearances in the investor preferences survey, with 25% of investors found having allocations to these funds.
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Credit Suisse Capital Services co-head of US Jaynita Sodhi said: “We saw a large upswing in demand for Discretionary Macro among investors surveyed, as volatility returned to the markets. As we witnessed going into 2018, equities remain top of mind for allocators. Also notable is the inclusion of ESG as a top strategy preference.”
The broader Asia-Pacific region and emerging markets were the most in demand. Besides, North America reported the largest positive demand swing.