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According to the new survey of investors and managers, called ‘The Extra Mile: Partnerships between Hedge Funds and Investors’, partnerships of varying forms between hedge funds and their investors are becoming increasingly common.
The survey found five key elements of partnerships: access to expertise and resources; customised products and solutions; co-investment; product seeding; and equity stakes. The survey revealed a number of benefits to investors, including improved knowledge and understanding, better alignment of interest with managers, and better value for money. Both larger and smaller managers and hedge funds of all strategies were found to be striking partnerships. Benefits to managers included “stickier” or more loyal investors, support for new product development, cross-selling opportunities and the offer of investor references.
The investors surveyed manage a combined $2 trillion in assets, of which approximately $260 billion is allocated to hedge funds. They include pension funds, endowments, foundations, sovereign wealth funds and family offices globally. The managers surveyed manage approximately $200 billion in assets.
Jack Inglis, AIMA’s CEO, said: “What the survey shows is that managers are truly going ‘the extra mile’ in terms of sharing knowledge and resources and providing customised products and services to their investor partners. These partnerships are also providing further evidence of very high levels of satisfaction among investors in their hedge fund investments.”