Consultants had better bone up on hedge funds — their institutional clients are not very confident about the advice they are getting, according to a new survey by hedge fund researcher, InfoVest21 LLC, New York.
InfoVest21 just released results of a survey of 76 institutional investors about their attitudes toward hedge funds. The survey found just 36% of respondents rated their consultant's expertise in hedge funds or funds of funds as "very knowledgeable." Corporate pension plan executives were kinder than their peers at public plans peers, endowments and foundations: 50% of corporate sponsors rated their advisors as very knowledgeable. Public pension plan executives were least generous with their praise, with only 25% giving their consultant the highest mark.
Despite the lack of confidence in the quality of hedge fund advice received, 67% of respondents told InfoVest21 that they used an investment consultant in funds-of-funds searches.
Regardless of the support received from consultants on hedge funds issues, institutional investors are optimistic about hedge fund returns, predicting an average 10.3% in 2005 with a 6.2% standard deviation.
