Deutsche Bank publishes sixth annual Alternative Investment Survey
Approximately 1000 respondents from 500 investor firms worldwide, representing nearly $1 trillion in hedge fund assets, participated in the industry’s largest comprehensive hedge fund investor survey
Deutsche Bank today announced the results of the sixth annual Alternative Investment Survey, which was conducted during March 2008 by the Bank’s Hedge Fund Capital Group. Over 1000 respondents from 500 institutions responded to this year’s survey, including banks, corporations, insurance companies, consultants, family offices, high net worth individuals, wealth management companies, funds of funds, pensions, endowments and foundations.
“Hedge fund investors’ prediction that the Middle East and North Africa will be the top performing region in 2008 indicates a clear redistribution of capital towards emerging markets,” said Sean Capstick, London-based Co-Head of the Hedge Fund Capital Group. “The survey also shows that the number of early stage investors has fallen by 25 percent in the past year, making 2008 a more challenging environment for startup funds.”
“Hedge fund investors are cautiously poised, as shown by their increased focus on risk management and plans to allocate to strategies which are not sensitive to equity market risk,” said Maarten Nederlof, New York-based Co-Head of the Hedge Fund Capital Group. “We also found that despite their overall bearish outlook on the economy, investors predicted more than $200 billion will flow into the industry.”
Highlights of Deutsche Bank’s Sixth Annual Alternative Investment Survey
- 80% of investors are bearish; however, investors are more optimistic for next year: 40% expect the global economy to pick up in 2009.
- For the first year since the survey has been conducted, investors have added Risk Management as a major manager selection criteria, in addition to Investment Performance, Investment Philosophy and Manager’s Pedigree.
- Cash levels are high as investors take a “wait and see” approach to hedge fund investing. However, 53% of investors holding cash now plan to eliminate their cash holdings over the next 12 months, suggesting a renewed focus to make allocations to hedge funds.
- The majority of investors surveyed plan to increase their allocations to emerging markets, with the Middle East as the predicted top performer amongst all regions.
- Hedge fund investors predict that Macro, Distressed, and Equity Volatility will be the top performing strategies for 2008.
- 70% of hedge fund investors do not currently use or apply leverage to their portfolios; 30% are actively leveraging their portfolios, including 6% through structured products.
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2008 Alternative Investment Survey