Company Website:
http://www.statestreet.com
LONDON & BOSTON -- (Business Wire)
A new global survey* commissioned by State Street (NYSE: STT) amongst
235 hedge fund professionals reveals strong optimism within the
industry. The findings show that respondents (55 percent) expect pension
funds to increase their exposure to hedge fund strategies over the next
five years. This figure increased to 63 percent when the question was
asked more broadly about institutional investors increasing their
exposure to hedge funds in the next five years.
Of the 55 percent of hedge fund professionals who expect pension funds
to increase their allocation, 53 percent believe the main driver of this
is the performance challenges facing investors’ portfolios. 35 percent
believe it will be a growing focus on portfolio diversification and 13
percent who think it will be improved terms offered by hedge funds.
However, to really capitalise on the growing appetite for hedge fund
strategies, nine out of ten industry professionals interviewed believe
hedge funds will be required to more clearly demonstrate their value to
prospective investors.
Maria Cantillon, global head alternative investment solutions sales at
State Street said, “Despite the challenges facing the hedge fund
industry, our findings show that many working in the sector are
optimistic about its future prospects. This is being fuelled by
challenges facing asset owners as they search for better returns and
greater diversification. The hedge fund industry is maturing and
becoming more transparent and competitive.”
In terms of how hedge fund professionals see their own firms changing
over the next five years, 60 percent expect to broaden the range of
investment strategies they manage; 37 percent anticipate that they will
expand abroad and one in ten expects to acquire another company.
According to the survey, regulation will continue to have a significant
impact on hedge fund managers. However, the full impact of Basel III is
yet to be determined, with 29 percent of respondents believing that it
will significantly increase their firm’s cost of financing, compared to
42 percent saying it wouldn’t and the remainder (29 percent) saying they
don’t know. The findings also suggest growing competition from
alternative mutual funds. Half of those interviewed believe that over
the next five years, they will seize market share from traditional hedge
fund strategies.
In a recently launched YouTube video series, State Street offers
perspective on the outlook for hedge funds in 2015. To view the videos,
click here.
*In October 2014, State Street engaged Citigate Dewe Rogerson to conduct
a global survey of hedge funds, asking them to make a set of five-year
predictions for the industry. Using the Preqin database, the survey
received 235 responses.
About State Street
State Street Corporation (NYSE: STT) is one of the world's leading
provider of financial services to institutional investors including
investment servicing, investment management and investment research and
trading. With $28.19 trillion in assets under custody and administration
and $2.45 trillion* in assets under management as of December 31, 2014,
State Street operates in more than 100 geographic markets worldwide,
including the US, Canada, Europe, the Middle East and Asia. For more
information, visit State Street’s web site at www.statestreet.com.
* Assets under management include the assets of the SPDR® Gold ETF
(approximately $27.3 billion as of December 31, 2014), for which State
Street Global Markets, LLC, an affiliate of SSgA, serves as the
distribution agent.
Contacts:
State Street Corporation
Anne McNally, +1 617-664-8576
www.statestreet.com
@StateStreet
Source: State Street Corporation
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