Wealthy Investors Approve of Alternatives

Filed in archive Hedgetalk on July 30, 2008

Surveying more than 400 high net worth investors with greater than $3 million in investable assets, the most recent Bank of America Survey of high net worth Americans indicates that US investors understand the risk and rewards of hedge fund investments.

Many expressed greater satisfaction over the last 12 months with their holdings in alternatives, including hedge funds, venture capital, real estate and private equity, than their more traditional investments, including stocks and bonds.

Negative stories published about hedge funds appear not to have deterred experienced hedge fund investors, according to the survey's findings. When asked if negative publicity about hedge funds impacted their investment decisions, 44 percent of those invested in hedge fund vehicles said no and only 20 percent said yes.

"Our study demonstrates that, despite the portrayal of hedge fund investors as risk-takers investing in aggressive managers," David Bailin, president of Bank of America Alternative Investment Solutions, said, "Many high net worth investors have a realistic understanding of the risks associated with their holdings and realize that large alternatives managers are institutional in their investment approach and the quality of their investment professionals."