Hedge fund investing is no longer about buying a product.
According to the latest survey by the Alternative Investment
Management Association and Barclays, investors are increasingly
striking partnerships with hedge funds, underlining the closer
collaboration taking place between the hedge fund industry and
its investor base.
The survey, called 'The Extra Mile: Partnerships between
hedge funds and investors’, covered investors and
managers managing $2 trillion and $200 billion of assets
It highlights that partnerships of varying forms between hedge
funds and their investors are becoming increasingly common.
More than three-quarters of managers and two-thirds of
investors who took part in the survey said they had entered
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
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 publication of this paper comes at an important time in
the evolution of the hedge fund industry. Amidst the on-going
process of institutionalisation, investors are actively
pursuing a more direct engagement with the underlying hedge
funds in which they are invested," said Michelle
McGregor-Smith, the chief executive of British Airways Pension
Investment Management and chair of the AIMA Investor Steering
"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," Jack Inglis,
AIMA’s chief executive officer.
To download 'The Extra Mile: Partnerships between Hedge Funds
and Investors’, please click here.