Hedge fund managers will have to rethink their business models, provide tailored solutions, and offer multi-faceted client communications to get ahead in the future, research conducted by SEI in collaboration with Minard Capital LLC revealed.
With seven out of 10 survey respondents asserting that "there are too many look-alike strategies in the industry," institutional investors are raising the bar for manager selection.
SEI’s insights are based on the sixth annual global survey of institutional investors, as well as the US-headquartered investment and technology consultancy’s insights from nearly 50 hedge fund managers, investors, and consultants regarding how the US$2 trillion-plus sector can improve.
The participants also noted that the combination of converging investment structures, shifting investor demands, and challenging market conditions are causing hedge fund managers to rethink their business models and develop multi-faceted solutions that package their capabilities most effectively.
Investors are increasingly concerned with how much "true alpha" they are getting for the hedge fund fees they pay, and investors, nowdays, have complex needs and want hedge funds to serve multiple objectives within an overall portfolio mix, the insights further highlighted.
Size also presents challenges and opportunities at either end of the hedge fund scale, according to the SEI research.