Almost two out of three European investors - 63% - said they intended to increase their allocation to global macro discretionary hedge funds in the first quarter, the same percentage as last quarter, according to the spring 2006 Hedge Fund Strategy Barometer from hedge fund adviser Tara Capital. About 23% of the 28 major European investors Tara surveyed said they prefer global macro discretionary over other strategies for the next 12 months. Emerging markets long-short strategies are the next most popular, with 41% of respondents indicating they will pump up their allocations. Other leading strategies included merger arbitrage (33%) and U.S. and Japanese long-short (30% each).
Strategies that dropped in popularity in the first quarter were fixed income, with 37% of respondents lowering their allocation, followed by convertible arbitrage and distressed with 26% each.
European investors said they are sticking with their allocations for a wide range of strategies, including global macro systematic (77%); U.S. sector specialist (74%); equity market neutral and dedicated short (70% each); and managed futures and global long-short (67% each).