International hedge funds are owned by many wealthy U.S. households and have been instrumental in growing their wealth
The wealthiest U.S. households invest substantial amounts in international hedge funds according to research recently completed by Spectrem Group. Half of households with more than $25 Million of net worth are currently invested in hedge funds with most wealthy households invested in more than three hedge funds.
While most report investments of averaging around $5 million or more in various funds, individuals will often invest substantially more with one particular fund and spread around risk with smaller amounts in different funds.
“Despite the negative press received by hedge funds, interest in these funds has actually increased in recent years because of frustration with the overall markets. It will be interesting to see if some of these wealthy households choose to just invest directly in the markets now that the Dow has risen considerably,” states George Walper, Jr. , President of Spectrem Group.
Sixty six percent of $25 Million plus households are invested in international hedge funds, according to research conducted in the fall. Countries seen as having the most potential continue to be China, Brazil, and India. Recent outflows due to the Egyptian crisis and additional unrest may impact these results.
“Interviews with these wealthy households have demonstrated that, in many cases, some of these funds were instrumental in growing the wealth of these households. International hedge funds are expected to be one of the future growth elements, “ predicts Walper.
Interest in hedge funds has moved to less wealthy households with 10% of households in the $5 million to $25 million segment also owning hedge funds.