Global hedge fund and investor survey 2012

Eurozone considerations

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Investors in EMEA are generally more sanguine about Eurozone issues than their counterparts in North America and Asia.

There’s little doubt the Eurozone crisis has affected the industry significantly. We asked managers how they’ve changed their business and operations in response – and if these adjustments are satisfactory to investors.

Focus on counterparty exposure, safekeeping and access to liquidity

Over half of investors globally are highly concerned with operations-related risk, such as a hedge fund’s exposure to European counterparties, as well as to changes in where cash is held. More than two in five are concerned about exposure to currency redenomination and any resulting market impact. And over half of hedge fund managers report that investors are inquiring about how the fund is responding to the Eurozone crisis.

Geographical differences

Investors in EMEA are generally more sanguine about Eurozone issues than their counterparts in North America and Asia. For instance, nearly two-thirds of North American respondents report being highly concerned with exposure to European counterparties. In contrast, nearly half of EMEA respondents report feeling neutral or not at all concerned with this issue.

Hedge funds are evaluating operational and market risks

Though many managers are making minimal or no changes in response to the Eurozone crisis, more than 30% have changed where cash and liquidity are held. Of these, a higher proportion of the largest funds have made changes. And, on balance, managers are trading with fewer counterparties and allocating business to European counterparties perceived to be stronger.

Hedge funds:

Have you made changes in any of the following areas due to the Eurozone crisis?

Chart: Have you made changes in any of the following areas due to the Eurozone crisis?

Investors:

[For those that are highly concerned about the Eurozone crisis] Do you believe that your hedge funds need to take action?

Chart: [For those that are highly concerned about the Eurozone crisis] Do you believe that your hedge funds need to take action?

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