One-third of Nordic investors to increase hedge fund exposures

Nordic investors are continuing to show optimism in hedge funds with nearly a third planning to increase their exposure this year to strategies like global macro, event driven and long/short funds, a new report shows.

The SEB Nordic Hedge Fund Investor Survey found 32% of investors in Sweden, Finland, Denmark and Norway plan to increase their allocations to hedge funds while only 2% plan to decrease their exposure.

Those planning to increase allocations dropped slightly from 40% in last year’s survey, but those who said they are planning to decrease their exposure going forward dropped sharply from 14%.

“The decrease is a lot less than it was last year. The appetite has increased and investors still have money on the table to be invested,” said Charlotte Bonde Tamm, head of capital introduction at SEB Enskilda Prime Brokerage and one of the authors of the report.

SEB surveyed investors with some $613bn in assets under management.

Global macro, equity long/short and event-driven strategies were the three most popular investments in 2010, though the list was slightly changed when investors were asked where they planned to invest throughout 2011.

Event-driven strategies then moved up to second place.

Market-neutral strategies ranked seventh in 2010, but moved up two slots for 2011, reflecting a lower risk tolerance among investors.

In terms of size, investors showed a preference for funds with between $250m and $1bn in assets.

“Just after 2008, when the bigger names in the market re-opened, we saw a lot of investors moving into these large names… But the downside is you become a small player in a big manager. Investors like to have a bigger stake in the manager,” said Tamm.

 

 

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