Hedge fund managers are more confident that institutional investors will dominate their client bases in 2011 than they were five years ago, according to a survey conducted by fund services vendor Rothstein Kass.
About 72% of the 313 hedge fund managers who responded to an Internet survey in January said they think institutional investors will be “the dominant source of new capital in 2011,” compared to 20% in Rothstein Kass’ 2007 survey, according to a report about the survey results released Wednesday.
Institutional investors will continue to direct their investments to larger hedge funds, said 82% of respondents, while 65% said hedge funds will offer special terms and share classes to institutional investors, including sovereign wealth funds.
“The institutionalization of the hedge fund industry is likely to accelerate in coming years,” Howard Altman, co-CEO and principal-in-charge of Rothstein Kass’ financial services group, said in a news release accompanying the survey report. “Though regulatory initiatives have played a role, the push for greater communication and transparency is still predominantly a market-driven phenomenon.”