Global Institutional Demand for Hedge Funds to Triple to $1 Trillion by 2010

Global institutional demand for hedge funds will triple by 2010, increasing from $360 billion currently to more than $1 trillion, according to a new study of leading institutional investors, investment consultants and hedge funds released today by The Bank of New York and Casey, Quirk & Associates LLC.
  2004 2006 2010
U.S. institutional investment in hedge funds $60 Billion $300 Billion $1 Trillion
The study, entitled "Institutional Demand for Hedge Funds 2: A Global Perspective," found that by 2010 institutions investing in hedge funds will increase to nearly 25% of all institutions, up from 15% today, representing a more than 60% increase. Retirement plans globally will account for the vast majority of asset flows, with corporate and public pension plans in the United States accounting for the largest percentage increase overall.

This study follows a 2004 study by the Bank and Casey, Quirk that examined U.S. institutional investor appetite for hedge funds. The 2004 study forecast that U.S. institutional investment in hedge funds would increase from $60 billion to $300 billion by 2008, a prediction that thus far is largely in line with actual investments by U.S. institutions.

The study shows that today's hedge fund techniques will be tomorrow's mainstream investing. The study predicts that half of global institutional flows will go to fund-of- hedge funds with the other half going to direct investments over the next five years.

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