US-based investors are looking across the pond for hedge fund opportunities despite great uncertainty and volatility in the Eurozone, according to Preqin.
Its data revealed a large majority (82%) of asset owners with appetite for European hedge funds were based stateside.
Even the increasing oversight and regulation of hedge funds didn’t stop US investors from considering these assets, the report said.
“Interest in European hedge funds remains strong, and to some extent, [the European Union’s] alternative investment fund managers directive may be an appealing ‘stamp of approval’ for investors looking for hedge fund products,” Preqin said.
Corporate pension plans made up the largest piece of American asset owners targeting European funds, Preqin found, with 39% showing appetite for exposures in the region.
They benefit from large assets under management, scale, and resources that allow for proper due diligence of managers across the Atlantic, according to the report.
Insurance firms and fund of hedge fund managers also showed significant preference for European hedge funds—34% of each group said they would explore potential opportunities.
More than 30% of public pension funds and 29% of foundations also expressed interest, Preqin said.
US endowments were more hesitant in diving into the Eurozone, with an overwhelming 84% displaying preference for local opportunities in North America.
Preqin argued that the volatility in the European markets, particularly as “Grexit” becomes a real possibility, has provided unique opportunities for investors to exploit.
However, according to Hedge Fund Research (HFR), uncertainty over a potential Greek default contributed to a drop in performance.
Its data showed the HFRI Fund Weighted Composite Index tumbled 1.3% in June, the worst monthly decline since June 2013. Specifically, the European index fell 0.84% in June and gained 4.02% year-to-date.
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