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Who Invests in Hedge Funds? A Sampling of the Hedge Fund Universe


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This educational infographic takes readers through the many types of hedge fund investors, offering data points along the way to illustrate the importance and magnitude of each class of investors.

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Who Invests in Hedge Funds? A Sampling of the Hedge Fund Universe

  1. 1. ® WHO INVESTS IN HEDGE FUNDS? /4 Samjb/ ing oft/ ye Iledge Firm! ’ Um'-verse A variety of individual and institutional investors partner with hedge U funds to help diversify portfolios, manage risk and produce reliable [I returns. Here is a glimpse of the hedge fund investor universe: ASSETS ElllllE FROM , PUBLIC PENSION PLANS REPRESENT MANY OF THE 'N9>IL'T, gsT'T‘: )"l: ’;‘E ' ' [] LARGEST PRIVATE- . - [I SECTOR EMPLOYERS IN PENSION y_, .ST, TUT,0. . ,._L THE U. S. ALSO UTILIZE HEDGE FUNDS AS AN PLANS CAPITAL I. -WESTED II. HEDGE FU_ .33. ESSENTIAL TOOLIN THEIR INVESTMENT TOOLBOX. This partnership provides reliable, risk adjusted returns that enable their retirement plans to pay benefits to millions of Americans. lEl-II -" lll% ofinstitutionalinvestor ‘ _-' E ‘V ‘ ‘t I" h d f d ' ' EZ? !.? ..l3.§. ."E, ‘;? ..ZlZ CORPORATE , secjtotr t: jensi. or(Ijfuntdsth. an so resin icae Is . allocation will continue to < grow in the coming years. * Public and state employee pension plans offer retirement security for millions of workers, retirees, and their families. TlIE‘. ’ ARE 0. ‘E OF THE. .OST PRO. ..| i ‘E. ‘T GROUPS OF I. ‘STITUTIDI ‘AL I. "IESTURS . .LLOCrTl. ‘G T0 HEDGE EU. ‘US. Investors in hedge funds range from unions such as, AFL-CIO to local retirement plans in Arkansas and teachers in Missouri. These, plans partner with hedge funds to help diversify their investments, manage risk, and help to provide economic security to their beneficiaries. I-{EDGE FUNDS HELP Among the firstinstitutional investors to begin ENABLE A ‘NUMBER OF Investing and forming partnerships with hedge . . funds thousands of universities and colleges around I I ’ CRITICAL FUI‘ C1-I0" S the world utilize hedge funds as an important tool in IENDOWIVIENTS THAI SUPP[]HI ‘“‘*"‘“"“""e'"“’°"‘°"°‘ During Fiscal Year2OI3, cndowincnts allocated an UNHS| ES average of 20 percent of their investment portfolio to marketable alternative investments, which includes AROUND THE WORLD: hedgefundsf-* FINANCIAL AID RESEARCH AND SALARIES FDR CAPITAL INIPROVEIVIEIIFIS ATHLETIC AND ACADEMIC CLINICAL » FACULTY SUCHASL| BRAlilES'AND PROGRAMS SCHOLARSHIPS I TRIALS ' OTHER FACILITIES FUND DFFUNDS REPRESENT , D _ ‘ FUND or 17% []F THE 9 HIGH-NET FUNDS HEDGE Eur-'D lll. HEl]l5EFUNl]. ""““‘“ iiiirisiriiisriiii ""”'V'””’“$ HIGH NET WORTH ‘INDIVIDUALS, REPRESENTING 3.6% OF THE TOTAL CAPITAL INVESTED IN HEDGE FUNDS. u. -'ivEHsE B‘. ’ ‘I’PE'*‘ Fund of funds offer investors the opportunity to diversify their portfolios, manage risk, and offer expertise in manager se| ection. _When investors choose fund of funds, they invest with a fund that then typically invests in a number of other lierlge funds relateil to _ its investment strategy. ' High-networth individuals remain an important part of the hedge fund investor base. High not wortli inzlivitluals, were sonic of the earliest investors Ill Iictlgr; furitls recognizing that alternative investments provide them with reliable, risk adjusted returns. FUND OF FUNDS REMAIN AN ATTRACTIVE OPTION FOR INVESTORS WHO DO NOT HAVE ‘THE INTERNAL CAPABILITY TO CONDUCT THE DUE DILIGENCE NECESSARY TO EVALUATE A PARTICULAR FUND INVESTMENT. o - o o - c o u ¢ - o o o - o - o o o o o o - o o o o o o - o o o o o o c o o o o o o o o - o ' - o o o o o o - o o o o o - u o o - o o o o o ' u u c o - o o o - o o o no Whether they are operating at the global level or THESEPIIOJECTS FOCUS ON A VARIETY OF in local communities, philanthropic foundations - ISSUES AND CAUSES, INCLUDING - play a significant role in helping to A lllPllllllElHE er [1l]AI| IYr[]I urr Pilllllllfllf ' INITIATIVES REDEVELOPMENT I DEIC, l%| i.T[]lmIlE| .NT IN ORDER TO ACHIEVE THEIR FINANCIAL GOALS, RESEARCH IN COMMUNITY HEALTH AND HEALTH SCIENCE FIELDS PROGRAMS I . . - . ¢ - c a - ¢ - - - - a - n - - . n - o u - n . - o ¢ - q ¢ - . a - - ¢ - u u n - o - - - - - o n - - . - . - - . q a q . u - - a - - - - - - - - c - - n n o . n - SOVEREIGN WEALTH FUNDS (SWFS) ARE INVESTMENT FUNDS RUN BY SOVEREIGN NATION STATES THAT SERVE MANY PURPOSES FOR THE NATIONS THAT OPERATE THEM. REPRESENTING NEARLYHALF OF SWF THE INSTITUTIONAL PRIVATE WEALTH s are generally borne UNIVERSE yr out of surplus revenue — . -' A commonly drive" by Their partnerships with hedge funds have commodity exportsjsuch ‘ continued toexpand in recent years, demonstrating the risk management and portfolio diversification benefits they recognize _that hedge funds provide to : :.? r1.. ;’; .:;2?3.. . SOVEREIGN These funds can be their pomconm established as pension ‘ funds or other investment Companies and their invested in hedge funds, with an average assets are invested in a i in their portfolios - a larger range Offinanclal numberthan many other institutional groups. ” products globally, focused- on Iona-term returns. FAMILY OFFICES REPRESENT Around the world, these funds are partnering with hedge F funds to help meet their financial goals, with the largest concentration of SWF investments coming from Asia and the Middle East/ North African (MENA) region’ visit manage(I_7fimds. org " Source: 2014 Preqin Global Hedge Fund Report, January 2014 § FAUpdates " Source: 2013 NACUBO<Commonlund Study of Endowments