Equity Funds in Demand
During the past two months, a large spectrum of institutional and private investors have been seeking funds trading public equities. While long/short equity funds are always popular, it appears that many investors think now is a time to seriously begin evaluating long/short equity funds for potential allocation.
Many investor firms, large and small, have expressed an interest in making allocations to equity funds by the end of 2009. The market has shown signs of stablizing and investors have been making a select list of managers to keep on their radar. According to BHA data, nine out of ten consultants surveyed have specific mandates for long/short equity managers. One consultant, for example, has a specific mandate for sector specialist equity managers. The firm wants to hear from U.S., European, and Asian managers that have global equity exposure; it plans to allocate to several managers by the end of 2009.
Morningstar recently reported that equity funds are among the top performers of all hedge fund strategies. Because of the strong results, investor firms have been actively researching, performing due diligence and allocating capital to long/short equity funds. Additionally, BHA finds that many firms are keeping an open mind as to the types of funds they
should research. For example, while some firms are expressing interest in emerging market equity funds, others are stating their interest in developed regions. Therefore, the significant rise in interest is not directed at certain segments only; rather, all types of equity funds are seeing greater attention from the investor community.
After much turmoil, equity markets seem to be recovering, which should translate to a healthier marketplace overall. And as we move closer to the end of 2009, it appears as though investors are beginning to show signs of deploying capital into the equity arena.