“Hedge funds — once synonymous with glamour, win-at-all-costs alpha males and bold market bets — are losing their appeal among wealthy investors, who question whether the traditionally pricey products are worth the cost.
Indeed, leading advisers have cut their clients’ allocations to such funds by as much as a third over the past year, FT research shows.
Hedge funds are one category among several types of alternative investments that broadly include anything that is not a stock or bond. Within this broader grouping, individual investors are gaining easier access to previously unattainable investments, such as private equity and real estate, which used to be accessible only via large commitments.
Financial advisers and their clients are considering these types of investments instead of hedge funds, says Joe Moran, a sales executive who works with financial advisers for BNY Mellon Investment Management, a unit of the US bank.
Private credit — a growing industry that converts investor capital into business lending — as well as private equity and real estate offer wealthy investors attractive yields compared to hedge funds’ recent spotty performance, says Mr Moran.” Financial Times Online platform, 22 June 2017
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