Investors plan to increase their allocations to emerging markets, with the Middle East predicted to be the top performer amongst all regions, according to a recently released Deutsche Bank survey. Deutsche Bank's sixth annual Alternative Investment Survey, was conducted during March 2008, by the Bank's Hedge Fund Capital Group. According to the survey, "Hedge fund investors' prediction that the Middle East and North Africa will be the top performing region in 2008 indicates a clear redistribution of capital towards emerging markets," says Sean Capstick, co-head of the Hedge Fund Capital Group. "The survey also shows that the number of early stage investors has fallen by 25 percent in the past year, making 2008 a more challenging environment for startup funds," he notes.
"Hedge fund investors are cautiously poised, as shown by their increased focus on risk management and plans to allocate to strategies, which are not sensitive to equity market risk," says Maarten Nederlof, co-head of the Hedge Fund Capital Group. "We also found that despite their overall bearish outlook on the economy, investors predicted more than $200 billion will flow into the industry," she says. Over 1,000 respondents from 500 institutions responded to the survey, including banks, corporations, insurance companies, consultants, family offices, high net worth individuals, wealth management companies, funds of funds, pensions, endowments and foundations.