Hedge Funds not Understood by Investors

Filed in archive Hedgetalk on March 29, 2007

In a story for HedgeCo.net - "According to a new Spectrem Perspective report released today, "Alternative Investments: Are They a Priority for Affluent Portfolios?", just 18% of affluent investors, defined as having more than $500,000 in investable assets, say they understand hedge funds. structured products are understood by only 15% of these investors and private placements come in at 19%."

"While hedge funds have been in the news like no other financial product recently, affluent investors still don't feel they understand these alternative investments. This gap in understanding corresponds with a distinct lack of interest in hedge funds and other alternative investments such as structured products and private placements.

Financial services providers offering these products need to be proactive in educating affluent investors about their risks and rewards. Given their lack of interest, it seems unlikely these investors will step forward themselves seeking more information," said Catherine S. McBreen, Managing Director of Spectrem Group.