Study Finds Increased Use of Hedge Fund Replication Products Likely

A new study has revealed that while a small portion of end investors are currently invested in hedge fund replication products, a third of respondents plan to invest in these products by the beginning of 2009. The global survey, conducted by Terrapinn and, examined the investment attitudes of asset managers, consultants, investors and service providers. Some key findings of the study include: 7% of investors currently invest in either hedge fund replication or alternative beta; 21% of investors plan to invest within the next 12 months; investors cite liquidity and lower fees as the top benefits of hedge fund replication; while the top obstacles to investing are that the products only replicate hedge fund averages and investors do not know enough about them. While hedge fund replication was originally seen as a way of avoiding the purchase of actively managed hedge funds, 69% of asset managers now view these products as complementary, not competitive.


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