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Shifting hedge fund landscape: Where institutions put fund managers to the test

Company: SEI Investment Manager Services

SEI Investment Manager Services case study

Category: Hedge Funds

Published: 29 March 2012

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Overview

Sweeping changes in the global environment and heightened market uncertainty are challenging hedge fund investors – including seasoned and sophisticated institutions – as never before. Some long-held assumptions, like hedge funds’ non-correlation with other asset types, have been shaken. Familiar paradigms are being questioned while new ones are still taking shape. Hard experience is also leading investors to broaden their definitions of risk and sharpen their methods of managing it. 

Still, institutional investors are putting their money into hedge funds in the quest for returns, continuing to deepen their commitment and increase allocations. At the same time, institutions keep ratcheting up the challenges and requirements they pose to hedge fund managers. In this new landscape, investors are pushing the industry to de-risk, to improve operations and governance, to enhance liquidity and to provide more windows into investment processes and decision-making. 

The year 2011 was an uncommonly rough one for hedge funds, and yet they have continued to grow with institutional assets as their mainstay. The fifth annual global survey of institutional hedge fund investors, conducted by the SEI Knowledge Partnership and Greenwich Associates, focuses on current trends affecting the hedge fund industry. 

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