âOur study confirms that hedge funds are more aggressively seeking out new sources of research than long only managers,â says Michael Mayhew, Integrityâs chairman and author of the study. âLong only managers are complacent about external research whereas hedge funds are continuously looking for whatâs new and innovative.â
Conducted in October, 2007, the survey polled forty-three research directors at US based hedge funds and long only institutional investors. The survey focused on how institutional investors source and value external research. Highlights from the study include:
â¢ Forty-two percent (42%) of hedge funds evaluate their portfolio of research providers at least monthly compared to five percent (5%) of long only managers.
â¢ Hedge funds are three times more likely to use external sources to identify research, with forty-five percent (45%) of hedge fund research directors using outside sources compared to thirteen percent (13%) for long only directors of research.
â¢ Thirty percent (30%) of hedge funds were either Not Too Confident or Somewhat Confident that they are using the best external research available compared to eighteen percent (18%) of long only managers.
âAs long only managers introduce more alternative product like 130/30 funds, they are talking the talk, but our survey suggests that they are not yet walking the walk,â adds Mayhew.