Hedge Funds Lead Alternative Investments As More Popular Portfolio Targets

by Stewart Douglas

Story link: Hedge Funds Lead Alternative Investments As More Popular Portfolio Targets

A report released today by Barclays Wealth reflected a growing trend towards alternative investment portfolio amongst the UK’s most affluent private investors, which is likely to show an overall growth in the area over the remainder of the decade.

Amidst market turmoil as a result of sub-prime lending unrest, investors are thought to be turning away from more volatile stock market investments to securer investment funds, some of which have been providing double-digit returns on a consistent basis with a limit on the potential losses at the end of the day.

The report into around 800 wealth investors from across the globe found that there was a vast increase in the proportion of those looking to invest more heavily in private equity based funds and hedge funds over the remainder of the decade.

Similarly the survey turned up a downturn in proposed investment in shares over the same period, with a likelihood of a more substantial downturn over the longer term, which many analysts have attributed to recent unrest in stock markets across the globe.

Stock markets around the world have been performing below expectations in recent months as a result of the knock on effect of the collapse of the US subprime lending sector earlier this summer. 

As a result many investors has sustained losses on their portfolios, giving rise to increasing levels of investment in alternative funds and so called hedge funds that pool private investment from numerous different sources, with a floor limit on investment to minimise losses in the event of a portfolio downturn.

It remains to be seen whether the lack of confidence in stock markets will continue to keep prices lower that they have been in recent years, and indeed whether hedge funds will continue their increase in prominence.