Hedge Fund Report ND REPORT

endowments have become some of the largest investors in hedge funds. As such, there are great opportunities to be had for hedge fund managers looking to source fresh capital from institutional investors, with a wealth of different investors, each with particular investment objectives and constraints, that can be targeted for capital raising.

North America is the most active institutional market for hedge funds, with 64% of institutional hedge fund capital coming from this region. In particular, the US boasts a diverse investor base comprising a large number of sophisticated hedge fund investors, including both funds of hedge funds and a broad range of institutions, from private wealth managers to union-backed pension funds.

Liquid hedge fund strategies are the most commonly sought among investors issuing mandates

under scrutiny from institutional investors in 2012, long/short equity remains the most commonly searched- for strategy, with global macro following as the second most commonly sought fund strategy.

Inception Long/ Relative Global Year

Pre 1996 39% 1996 1997 1998 1999 2000 recently.

Underwhelming performance and market volatility has made greater liquidity a more attractive quality to institutional investors. Despite coming

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2008 riven Strategies 2009 2010 2011 Other 2012 2012 52% 54% 45% 57% 48% 47% 50% 54% 52% 48% 54% 53% 45% 44% 47% 45% 45% 38% 23% 25% 26% 18% 25% 20% 20% Multi- Event Driiven

Short Value Macro Strategy Strategies 4%

10% 6% 10% 10% 6% 10% 15% 8% 11% 15% 8% 8% 8% 6% 10% 10% 10% 9% 17% 23% 24% 20% 19% 25% 28% 22% 26% 22% 8% 3% 7% 5% 5% 9% 12% 7% 10% 11% 9% 8% 9% 6% 8% 6% 5% 8% 11% 6% 10% 12% 11% 8% 10% 11% 6% 7% 8% 10% 7% 8% 8% 10% 5% Other 1% 0% 1% 1% 3% 1% 2% 0% 2% 1% 2% 2% 3% 5% 4% 3% 4% 6%