Direct investing in hedge funds up globally: survey

Global institutional investors have taken to direct hedge fund investing following the global financial crisis, with $820 billion from pensions and sovereign wealth funds now directly invested in hedge funds, according to a new survey.

The Citi Prime Finance Survey found that small to medium hedge funds managing between $1 billion and $5 billion experienced the largest net growth in 2010.

The survey found that pensions and sovereign wealth funds have not only been increasing their hedge fund investment programs, but are taking a more active and “direct” approach to allocating these investments, as opposed to using traditional fund of funds.

Size, maturity and stability were found to be equally important in reaching institutional investors.

The survey looked at 60 major investors representing $1.65 trillion in assets under management, as well as hedge fund managers representing $186 billion in assets under management.