seb’s nordic hedge fund investor survey 2011
TRANSCRIPT
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
1/28
NordicHedgeFund
InvestorSurvey2011
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
2/28
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
3/28
SEB Enskilda Nordic Hedge Fund Investor Survey|
TABLE OF CONTENTS
Table of ContentsAcknowledgement 4
Key Findings 5
Investor Profile 6Distribution o survey respondents by country Distribution o survey respondents by assets Distribution o survey respondents by investor type Distribution o AUM by investor asset size Maximum percentage allocation o total assets to hedge unds (excl FoHF) Current percentage allocation to hedge unds (excl FoHF) Allocation to single managers versus Fund o Hedge Funds
The Investment Process 10Length o investment process How investors ind hedge unds
Use o external advisors when investing Use o external consultants to make operational DDQ Number o manager meetings during Number o irst meetings during Reinvestments in hedge unds 3
Thresholds To Invest 14Track record requirements Investors level o interest in managers number o years in operation Investors appetites or unds AUM levels Maximum concentration Minimum asset size Liquidity requirements Acceptance o lock-ups Sensitivity to ee structures Interest in managed accounts Legal structure pre erences
Allocations 19Expectations o hedge und allocations increase/decrease during Regions where investments have been made during Regions where investors expect to increase their allocations during Distribution o investments by strategy
Expected increase o allocations or by strategy Strategies expected to per orm avourably during Strategies that are hard to ind
UCITS Funds 23Investments in UCITS Funds 3Considerations to invest in UCITS Funds 3
Conclusions 24
Contact Details 26
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
4/28
4 | SEB Enskilda Nordic Hedge Fund Investor Survey
ACKNOWLEDGEMENT
Acknowledgement
For the second year, we are pleased to present the SEBEnskilda Capital Introduction 2011 Nordic Hedge Fund
Investor Survey. This empirical survey collects responsesfrom investors actively allocating capital to hedge funds.We intend to continue conducting this survey on an annualbasis. The responses we have received provide a valuableinsight into the Nordic investor sentiment and we would liketo thank all the investors that have participated.
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
5/28
SEB Enskilda Nordic Hedge Fund Investor Survey| 5
KEY FINDINGS
Key FindingsInvestor profile The respondents o this survey represent over $ billion o assets under management.
The biggest investors are Pension Funds , Insurance Companies and Asset Managers . Investors that have a mandate to allocate up to 3 % o their total assets represent % o the
respondents, excluding Fund o Hedge Funds. Within this interval, the average maximumallocation rate is % and the most requent investor type is Pension Funds.
Most investors have not yet illed their maximum allocation quota to hedge unds and thus havecapacity to invest more in hedge unds.
Compared with last year, more investors are investing in single managers as opposed to investingin Fund o Hedge Funds.
Investment process
The investment process has become longer and exceeds six months or many o the respondents. The most common way to ind hedge unds is through hedge und seminars and con erences as
well as Capital Introduction teams. Most Nordic investors are con ident in their own ability to pick hedge unds and do not use
external advisors when investing and when making operational DDQ. The large majority o the respondents do not seed hedge unds. Among the ones that do seed,
% seed to receive a ee discount or capacity.
There is a good appetite to invest in unds that investors have not yet invested in.
Thresholds to invest Most investors want at least two years o track record be ore they invest. Also, there is a trend
to pre er managers with at least ive years o experience. However, % say that they are willingto invest at an early stage.
There is an increased interest in unds that have $ m-$ b in assets under management. Nordic investors have a large lexibility with regards to und asset size.
Nordic investors ocus on the und strategy, whereas the legal structure is a secondary issue.
Allocations
3 % o investors expect to increase their allocations to hedge unds and only % expect todecrease their allocations. Last year, % o the investors expected to decrease their allocations. Global Macro and Long/Short Equity were most popular during , which is what the investors
expected in last years survey. Global Macro is expected to keep its popularity during . Global Macro, Event Driven and Equity Long/Short are the strategies that the investors expect to
per orm most avourably during . We see an increased interest in investing in the Asia Ex-Japan region.
In this survey Pension Funds include State, Corporate, and Mutual Pension FundsInvestment companies and wealth management
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
6/28
6 | SEB Enskilda Nordic Hedge Fund Investor Survey
INVESTOR PROFILE
Investor Profile
Swedish investors represent % o the Nordic investors in this survey.
60%15%
13%
12%
Sweden Finland Denmark Norway
1
4
4
7
11
135
185
266
0 50 100 150 200 250 300
AUM ($ billion)
Asset M anager
Insurance Company
Pension Fund
Funds of Funds
Advisor
Family Office/PrivateInvestor
Bank
Private Bank
Distribution of survey respondents by country
Distribution of survey respondents by assets
The respondents o this survey represent $ 3 billion. The biggest investors are assets managers,insurance companies and pension unds with more than $ billion in assets under management.
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
7/28
SEB Enskilda Nordic Hedge Fund Investor Survey| 7
INVESTOR PROFILE
Most o the respondents represent pension unds and asset managers.
29%
20%
15%
7% 7%
5%
3%
0%
5%
10%
15%
20%
25%
30%
35%
Pension Fund
Asset Manager
Insurance Company
Funds of funds
Advisor / Consultant
Family Office / Private Investor
Bank
Endowment / Foundation
Private Bank
2%
12%
Almost % o investors have at least $ billion under management.
5%
8%
21%
45%
21%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
< $100m $100m - $500m $500m - $1,000m $1,000m - $10,000m > $10,000m
Distribution of AUM by investor asset size
Distribution of survey respondents by investor type
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
8/28
8 | SEB Enskilda Nordic Hedge Fund Investor Survey
INVESTOR PROFILE
Maximum percentage allocation of total assets to hedge funds (excl FoHF)
Investors that have the mandate to allocate up to 3 % o their total assets represent % o therespondents, excluding Fund o Hedge Funds. Within this interval, the average maximum allocationrate is % and the most requent investor type is Pension Funds.
40%
30%
4% 4%
22%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
< 10% 10% - 20% 20% - 30% 30% - 50% > 50%
% o investors have allocated less than % o their total assets to hedge unds. Within the intervalo 3 %, the average current percentage allocation is % and the most requent investor type isPension Funds.
23%
6%
0%
16%
55%
0%
10%
20%
30%
40%
50%
60%
< 10% 10% - 20% 20% - 30% 30% - 50% > 50%
Current percentage allocation to hedge funds (excl FoHF)
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
9/28
SEB Enskilda Nordic Hedge Fund Investor Survey| 9
INVESTOR PROFILE
Allocation to single managers versus Fund of Hedge Funds
% o investors do their major hedge und investments in single managers, as opposed to investingin Fund o Hedge Funds.
22%
0%
11%
16%
51%
0%
10%
20%
30%
40%
50%
60%
< 25% 25% - 50% 50% - 75% 75% - 100% 100%
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
10/28
10 | SEB Enskilda Nordic Hedge Fund Investor Survey
INVESTMENT PROCESS
The Investment Process
% o investors have an investment process that is shorter than six months.
3%
8%
46%
43%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
< 1 month 1-3 months 3 -6 months > 6 months
To ind hedge unds, most investors use hedge und seminars and con erences as well as CapitalIntroduction teams.
61%
54% 54%51%
39%
24% 22%
15%12%
0%
10%
20%
30%
40%
50%
60%
70% Hedge fund seminars andconferencesCapital Introduction teams
Other
Industry colleagues
Third party marketeer
Online hedge fund researchproviders
Investment advisors
Newspapers & Magazines
Newsletters
How investors find hedge funds(multiple answers allowed)
Length of investment process
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
11/28
SEB Enskilda Nordic Hedge Fund Investor Survey| 11
INVESTMENT PROCESS
Use of external advisors when investing
Almost three quarters o investors are con ident in their own ability to pick hedge unds.
27%
73%
Use external advisors
Do not use external advisors
About one third o investors use external consultants to make operational DDQ on hedge unds be oreinvesting.
32%
68%
Use external consul tants
Do not use external consultants
Use of external consultants to make operational DDQ
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
12/28
12 | SEB Enskilda Nordic Hedge Fund Investor Survey
INVESTMENT PROCESS
Number of manager meetings during 2010
The investors together had more than 3, manager meetings during . 3 % o investors hadmore than meetings.
36%
8%
22%
3%
31%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0- 25 25- 50 50-75 75- 100 >1 00
55%
17%14%
3%
11%
0%
10%
20%
30%
40%
50%
60%
0- 25 25- 50 50-75 75- 100 >1 00
Number of first meetings during 2010
The investors were asked how many managers they met or the irst time. % o the respondents
answered that they met up to managers or the irst time during .
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
13/28
SEB Enskilda Nordic Hedge Fund Investor Survey| 1
INVESTMENT PROCESS
22%
9%
6%
25%
38%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0-10% 10-25% 25-50% 50-75% 75-100%
Reinvestments in hedge funds
During , 3 % o the respondents placed the majority o their allocations in hedge unds thatthey had not yet invested in.
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
14/28
14 | SEB Enskilda Nordic Hedge Fund Investor Survey
THRESHOLDS TO INVEST
Thresholds to Invest
Most investors want months or more o track record be ore they are willing to invest. However, % say that they are willing to invest at an early stage.
21%
4%
21% 22%
32%
0%
5%
10%
15%
20%
25%
30%
35%
0-6 mont hs 6-12 mont hs 12-24 mont hs 24-3 6 mont hs > 36 mont hs
The majority o investors seek managers with at least two years o experience.
6% 6%
18%
47%
69%
6%
21%
38%
47%
28%
44%
35%
32%
3%3%
44%38%
12%3%
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Day 1 Less than 1 year 1-2 years 2-5 years Greater than 5years
No Interest
Low
Medium
High
Investors level of interest in managers number of years in operation
Track record requirements
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
15/28
SEB Enskilda Nordic Hedge Fund Investor Survey| 15
THRESHOLDS TO INVEST
Investors appetites for funds AUM levels
Most investors pre er unds with $ m-$ b in assets under management.
6%
26%
51%
40%
18%
20%
37%
40%
46%
47%34%
26%
6% 14%
32%40%
11%3%
0%3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
< $50m $50m-$250m $250m-$1b $1b-$5b > $5b
No interest
Low
Medium
High
The majority o the respondents restrict their investments to represent a maximum percentage o % o a und.
0%
27%
23%
5%
27%
18%
0%
5%
10%
15%
20%
25%
30%
0 -5 % 5 -1 0% 1 0- 15 % 1 5- 20% 2 0- 25 % > 2 5 %
Maximum concentration
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
16/28
16 | SEB Enskilda Nordic Hedge Fund Investor Survey
THRESHOLDS TO INVEST
Minimum asset size
% o investors do not require unds to have a minimum asset size be ore they invest. % oinvestors that do have minimum asset size limitations require the und to be bigger than $ million.
21%
24%
22%
9% 9%
15%
0%
5%
10%
15%
20%
25%
30%
< $50m $50m-$100m $100m-$250m $250m-$500m > $500m Have no such requirement
The respondents pre er more liquid strategies, where monthly liquidity is the most commonrequirement.
59%50%
61%
28%
6%
19%30%
33%
25%
22%
14%17%
3%
30%
30%
8%3% 3%
17%
42%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Daily Weekly Monthly Quarterly Less liquid
No Interest
LowMedium
High
Liquidity requirements
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
17/28
SEB Enskilda Nordic Hedge Fund Investor Survey| 17
THRESHOLDS TO INVEST
Acceptance of lock-ups
3 % o investors accept lock-ups i the strategy so requires.
53%47% Accept lock-ups
Do not accept lock-ups
The respondents are the least sensitive to management ees at % or less.
88%
12%
6%
12%
24%
12%
65%
74%
59%
63%
0%
23%
20%
29%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Management fees 2% or less
Management fees 2% orgreater
Expenses pass throughstructures
Incentive fees greater than20%
Draw-down recapture highwater mark
Acceptable - if net returns warrant May consider - but prefer not Precludes investment
Sensitivity to fee structures
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
18/28
18 | SEB Enskilda Nordic Hedge Fund Investor Survey
THRESHOLDS TO INVEST
Interest in managed accounts
3 % o investors are interested in structures solutions such as managed accounts.
37%
63%
Interest in structured solutions
No interest in structured
solutions
% o investors have no pre erence regarding legal structure.
20%
23%
25%
50%
0% 10% 20% 30% 40% 50% 60%
No preference
UCITS
On-shoreOff-shore
Legal structure preferences(multiple answers allowed)
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
19/28
SEB Enskilda Nordic Hedge Fund Investor Survey| 19
ALLOCATIONS
Allocations
3 % o the Nordic investors are expecting to increase their allocations to hedge unds during .Only % o the respondents expect to decrease their allocations.
32%
2%66%
Increase
Decrease
Remain unchanged
The European, American and Nordic regions were the largest targets or the Nordic investors during .
2%
15%
17%
17%
44%
63%
68%
78%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Europe
USA
Nordic
Asia ex-JapanLatin America
Japan
Eastern Europe
Africa
Regions where investments have been made during 2010(multiple answers allowed)
Expectations of hedge fund allocations increase/decrease during 2011
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
20/28
20 | SEB Enskilda Nordic Hedge Fund Investor Survey
ALLOCATIONS
Regions where investors expect to increase their allocations during 2011(multiple answers allowed)
The American region represents the largest investment target during .
5%
7%
10%
12%
24%
37%
39%
46%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
USA
Europe
Asia ex-Japan
Nordic
Latin America
Japan
Eastern Europe
Africa
Global Macro and Long/Short Equity were the two most popular strategies during .
7%
7%
10%
10%
10%
12%
17%
17%
17%
22%
32%
34%
41%
44%
44%
46%
49%
56%
61%
0% 10% 20% 30% 40% 50% 60% 70%
Global Macro
Equity Long/short
Event Driven
Credit
Multi Strategy
CTA/Managed Future
Market Neutral
Fixed Income Arbitrage
High Yield/Distressed
Commodities
Other
Merger Arbitrage
Currencies
Volatility Arbitrage
Statistical Arbitrage
Equity Long/short, High Turnover Trading
Convertible Arbitrage
Equity Long/short, Small/Mid Cap
Equity Long/short, Short bias
Distribution of investments 2010 by strategy(multiple answers allowed)
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
21/28
SEB Enskilda Nordic Hedge Fund Investor Survey| 21
ALLOCATIONS
Expected increase of allocations for 2011 by strategy(multiple answers allowed)
Global Macro is expected to be the most popular strategy during .
0%0%0%
2%2%
2%7%
10%10%10%10%
15%15%
17%17%17%
20%22%22%
39%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Global MacroEvent DrivenCTA/Managed FutureFixed Income ArbitrageMarket NeutralEquity L ong/shortCommoditiesOtherCreditMulti StrategyMerger ArbitrageHigh Yield/DistressedCurrenciesEquity Long/short, High Turnover T radingVolatility Arbitrage
Statistical ArbitrageEquity Long/short, Sector biasEquity Long/short, Small/Mid CapEquity Long/short, Short biasConvertible Arbitrage
Global Macro and Event Driven are the strategies that most investors believe to per orm mostavorably during .
0%0%0%0%
2%2%
5%7%
10%
15%15%
20%22%22%
24%29%29%
34%49%
12%
0% 10% 20% 30% 40% 50% 60%
Global MacroEvent DrivenEquity Long/shortCTA/Managed FutureCreditMulti StrategyHigh Yield/DistressedFixed Income ArbitrageMerger ArbitrageCommoditiesOtherMarket NeutralCurrenciesEquity Long/short, High Turnover TradingVolatility ArbitrageEquity Long/short, Sector biasStatistical ArbitrageEquity Long/short, Small/Mid CapEquity Long/short, Short biasConvertible Arbitrage
Strategies expected to perform favourably during 2011(multiple answers allowed)
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
22/28
22 | SEB Enskilda Nordic Hedge Fund Investor Survey
ALLOCATIONS
Strategies that are hard to find
When asked about strategies that the investors thoughtwere hard to find, the responses from investors were
mixed. Among others, Discretionary Macro, FX andCTA strategies were mentioned to be difficult to find.
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
23/28
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
24/28
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
25/28
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
26/28
26 | SEB Enskilda Nordic Hedge Fund Investor Survey
CONTACT DETAILS
Contact DetailsJonas Lindgren Albert Hammar Head of Prime Brokerage Head of Prime Brokerage Sales+46 8 506 23 306 +46 8 506 23 308
Charlotte Bonde Tamm Caroline LundstrmHead of Capital Introduction Survey Editorial
+46 8 506 23 311 +46 8 506 23 065
Prime BrokerageSEB Enskilda Prime Brokerage is a unit exclusively set up to provide service to money managers withan absolute return ocus, all strategies, structures and geographies. SEB Enskilda Prime Brokeragehas over 3 years o experience with leading European and US Hedge Funds, and over 3 HedgeFund clients.
DisclaimerThe in ormation in this document has been compiled by SEB Merchant Banking, a division oSkandinaviska Enskilda Banken AB (publ) (SEB). It is produced or private in ormation orecipients and SEB is not soliciting any action based upon it. All in ormation has been compiled ingood aith rom sources believed to be reliable. However, no representation or warranty, expressedor implied, is made with respect to the completeness or accuracy o its contents and the in ormationis not to be relied upon as authoritative. Recipients are urged to base any investment decisionsupon such investigations as they deem necessarily. To the extent permitted by applicable law, noliability whatsoever is accepted or any direct or indirect loss arising rom the use o this documentor its content. Your attention is drawn to the act that SEB, or any entity associated with SEB or itsa iliates, o icers, directors, employees or shareholders o such members may rom time to timehave holdings in the securities mentioned herein.
Confidentiality NoticeThis report is con idential and may not be reproduced or redistributed to any person other than itsrecipient rom the Bank. Skandinaviska Enskilda Banken AB (publ), . All rights reserved.
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
27/28
Investor Survey
-
8/6/2019 SEBs Nordic Hedge Fund Investor Survey 2011
28/28
7
SEB EnskildaPrime Brokerage & Capital Introduction
Copenhagen + 33 Frank urt + Helsinki + 3
London + New York + Oslo + Stockholm + 3
[email protected]@seb.sewww.seb.se/pb
SEB is a leading Nordic nancial services group. As a relationship bank, SEB in Sweden and the Baltic countrieso ers nancial advice and a wide range o nancial services. In Denmark, Finland, Norway and Germany thebanks operations have a strong ocus on corporate and investment banking based on a ull-service o ering
to corporate and institutional clients. The international nature o SEBs business is refected in its presence insome countries worldwide. On March , the Groups total assets amounted to SEK , billion while itsassets under management totalled SEK , billion. The Group has about , employees. Read more aboutSEB at www sebgroup com