Australian hedge funds $1.5bn boost

Australian hedge funds look likely to receive a $1.5 billion boost in investments over the next five years, according to new research.

The study, conducted by the University of New South Wales and commissioned by the Alternative Investment Management Association (AIMA), found that trustees of superannuation funds were planning to invest more heavily in hedge funds over the next two to five years.

Kim Ivey, AIMA chairman, said that super fund trustees were seeking diversity in the sources of risk and return in their funds, making hedge funds an attractive option as the industry grows and they became more familiar with the new non-traditional investments.

"Super funds are realising that with US$30 billion already invested in hedge funds, Australia is a sophisticated centre for hedge fund activity in the region," he said.

Mr Ivey also believes that the increased interest of superannuation funds in hedge fund investment is not a trend restricted to Australia.

"If you look at the pension funds in the UK and the US as opposed to endowments who have long been big hedge fund investors, it is only now those pension funds have started to invest," he added.

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