The hedge fund industry could see up to $80 billion (€59 billion) in net flows during 2014, an increase of nearly 25% over 2013, and the largest amount since 2007, Barclays says.
There could also be almost $285 billion of reallocations during the year, the survey by Barclays’ prime services business of investors with $490 billion invested in hedge funds suggests.
The Waiting to exhale report finds that combined, the total amount of “money in play” for the industry could approach $365 billion.
Lou Molinari, head of capital solutions at Barclays, says: “While almost half of our surveyed investors felt that hedge funds performed poorly relative to their expectations in 2013, there appears to be no negative impact. More than 90% of even these disappointed investors plan either to maintain or increase their current hedge fund allocations.”
Barclays says the report shows investors are more bullish on the hedge fund industry than in recent years, and the challenge posed by outperformance of bond and equity markets may be receding.
Barclays surveyed 190 investors and held detailed one-on-one conversations with an additional 30 investors.
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