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Institutional investors expect more from hedge fund managers: SEI Survey

Institutional investors expect much more from hedge fund managers in terms of articulating their value proposition, risk mitigation methodology, and performance expectations, according to a study released by SEI in collaboration with Greenwich Associates.

The report, entitled "The Shifting Hedge Fund Landscape: Institutions Put Fund Managers to the Test," indicates a need for hedge fund managers to help clients clearly understand their investment strategies, performance expectations, and the tradeoffs between risk and reward to maintain investor confidence and attract new capital.

The survey found that 38% of institutional investors’ plan to increase target allocations over the next 12 months, against 54% in 2010.

Hedge fund allocations represent a greater share of respondents’ overall portfolios, at nearly 18%, up from 12% in 2008.

The survey also shows that long/short equity strategies are currently the most popular in the industry with 82% of those surveyed, followed by event-driven and credit.