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Hedge Fund investors confident amid Madoff scam

Unfazed by the Madoff scandal and poor returns during 2008, majority of institutional investors remain committed to hedge funds in the long term and will continue to invest, a latest report says.

business Updated: Feb 22, 2009 10:48 IST

Unfazed by the Madoff scandal and poor returns during 2008, majority of institutional investors remain committed to hedge funds in the long term and will continue to invest, a latest report says.

According to a survey by alternative assets research and consultancy group Preqin, even after facing turbulence in the last 12 months, investor confidence in hedge funds has remained positive.

About 77 per cent respondents have stated that they remained confident about the fund houses and will continue to invest, the survey revealed.

Further, 26 per cent investors also plan to increase their allocations over 2009, it added.

“Institutional investors appear remarkably unfazed in light of the Madoff scandal and the under-performance of many hedge funds over 2008,” Preqin spokesperson Amy Bensted said.

Although investors will be carrying out more stringent due diligence checks on potential funds... the first time or emerging fund managers out there can still expect inflows of capital from institutional market, Bensted added.

The survey, conducted in January among diverse institutional investors located across the globe, stated 25 per cent investors would be increasing their allocations over the next 12 months and believe exciting opportunities would open up in the market.