Will Family Offices Have a Bigger Appetite for Hedge Fund Allocations in the Next 10 Years?
A leading U.S.-based family office consultant weighs in.
18 July 2019
In the fast-changing world of private equity (PE), hedge funds, private credit and real estate classes, a deep understanding of what limited partners (LPs) are thinking in terms of future plans is crucial intelligence for general partners (GPs).
The 2020 SS&C Intralinks LP Survey, an in-depth analysis of trends and behaviors by LPs informed by interviews with over 180 global LPs, will shed light on a selection of pertinent topics, including:
- Asset performance review
- GP selection criteria
- Transparency & reporting
- Investment allocation trends
For a preview of the full survey, which was produced in association with Private Equity Wire, we’ve released a summary of some of the report’s top findings.
The infographic – a snapshot of the full survey – provides insight into some key market factors going into 2020. Some revelations on this year’s research: Investors are continuing to align toward mid-market PE on the back of strong, risk-adjusted performance last year and a favorite asset class in 2019.
“Based on conversations I’ve had with other family offices, people are more optimistic about hedge funds for the next 10 years than they were in regard to the last 10 years.” – U.S.-based family office consultant
Sentiment about technology is also covered in the new report. Thirty-five percent of LPs cited portfolio and risk analytics as the most important technology tool, proving that getting a clearer picture of performance and risk exposure – on an overall aggregate basis – is top of mind for investors who want to make the most informed investment allocation decisions possible. To further whet your appetite, I’d like to share an interesting anecdote from a leading U.S.-based family office consultant on what they thought LPs regarded as generating the best risk-adjusted returns.
When asked about hedge funds, the consultant said, “Conversationally, I think people are more optimistic about hedge funds over the near-term, on the expectation there will be some sort of liquidity crisis or sociopolitical crisis.”
The consultant added, “Hedge funds perform best when interest rates are higher but also when there are periods of strong market uncertainty. Based on conversations I’ve had with other family offices, people are more optimistic about hedge funds for the next 10 years than they were in regard to the last 10 years.”
As Sr. Director of Strategy and Product Marketing for Intralinks, Meghan McAlpine is responsible for the go-to-market strategy and driving the growth of the company’s Alternative Investments solution, the leading communication platform for private equity and hedge fund managers and investors.
Prior to joining Intralinks, Meghan worked in the Private Fund Group at Credit Suisse. While at Credit Suisse, she raised capital from institutional and high net worth investors for domestic and international private equity firms.