Investors increasingly are striking partnerships with hedge funds, underlining the closer collaboration taking place between the hedge fund industry and its investor base, according to a new survey by the
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.
More than three-quarters of managers and two-thirds of investors who took part in the survey said they had entered into partnerships.
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
"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."
"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
"Managers who are interested in pursuing partnerships should put in place a strategy to do so, identifying those investors they want to partner with, and deciding which of the elements of partnership they are best-placed to deliver."
With over 300 years of history and expertise in banking,
The Capital Solutions team within Barclays Prime Services offers a unique blend of industry insights and tailored client solutions for a broad range of issues.
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