Fund investors forced to cast wider net

| 09/05/2011

(CNS): Emerging markets hedge funds have been making a comeback since the financial crisis saw their assets almost halve but investors are having to cast far and wide to find a suitable fund. In the final three months of last year, these funds took in $10bn, lifting total assets for the sector to $114bn – just $2bn shy of their previous peak in 2007. The inflows have followed a spell of investment outperformance. The emerging markets hedge funds index published by data provider Hedge Fund Research gained 11.8% for 2010, compared with 10.3% for the hedge fund industry as a whole. But institutional investors are not feeling spoilt for choice.

Investors are inclined to focus on large managers, with global funds, because investing in emerging markets is risky. Vincent McEntegart, a partner of fund of funds manager Goodhart Partners, said: “UK pension funds and investment consultants complain that there are no good emerging markets managers.”

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