HNWIs cool on allocation to hedge funds

Hedge Funds Review Magazine- In early 2007 HNWIs bet heavily on riskier asset classes. However further into the year, financial market turmoil and economic uncertainty intensified and HNWIs began to shift their investments to safer, less volatile asset classes.

Exposure to property and hedge funds was reduced in favour of safer investments, according to the “World Wealth Report” from Merrill Lynch and CapGemini.

An increasing proportion of hedge fund assets are coming from institutional investors instead of wealthy clients. This is shifting the main drivers of the industry’s growth.

“This year’s report found that the number of high net worth individuals, and the amount of wealth they control, continued to increase in 2007, with the greatest wealth being created in the emerging markets of India, China, and Brazil,” said Nick Tucker, market leader for the UK and Ireland, global wealth management arm at Merrill Lynch.

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