Hedge fund investors expect to redeploy as much as $82 billion into hedge funds from cash over the next six months, according to Deutsche Banks report on its seventh annual alternative investment survey.
Respondents, who are sitting on $294 billion in cash reserves, said they intend to reduce that stockpile to about $212 billion if the market stabilizes, according to the survey report released today.
Much of that cash will likely be invested in larger hedge funds, Deutsche Bank said in the report, with half of the 1,000 respondents indicating they invest in hedge funds with between $800 million and $4 billion under management.
While investors remained committed to investing in larger hedge funds, 75% predicted that the hedge fund industry will experience net outflows in 2009, and 30% of all respondents think those outflows will exceed an aggregate $200 billion.
Executives from hedge funds of funds, pension funds, endowments, foundations, family offices and other institutional investors, were surveyed in February. About 50% of the respondents were from hedge funds-of-funds managers.