Bad News for Money Managers: Institutions Aren’t Buying It!
| Sep 21st, 2006 | Filed under: Hedge Fund Industry Trends | By: Alpha Male |
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Surprise, surprise. While money managers of all stripes extol the virtues of new investment strategies like portable alpha, pension funds remain skeptical. Could money managers be trying to pull a fast one on the pension community or are 
pension managers hopelessly out to lunch?
A new study sponsored by Citigroup and T. Rowe Price, reveals that portable alpha, hedge funds and liability-driven investments (portable alpha’s second cousin), are recommended by 60% of institutional money managers as being best suited to meeting pensions’ needs over the next 5 years. Yet these types of products didn’t even make the top 5 mentioned by pension managers overseeing more than $30 trillion of assets in aggregate.
What gives? According to the study’s authors, Create, a UK-based consultancy, institutional investors want these products to be, “more understandable, more transparent, less risky, more liquid, less volatile, and/or more customized.”
While institutional investors may prefer a more prudent approach to “new” products, they understand the future is alpha-centric. Say the authors:
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[...] Bad News for Money Managers: Institutions Aren’t Buying It! [...]