On 23 October 2013 the Swiss Fund & Asset Management Association (“SFAMA”) held an interesting media conference titled: Alternative Investments – 5 Years On From The Financial Crisis.
The 2008 financial crisis fundamentally changed the hedge fund and private equity business, or private markets activities for short, confronting the market with new business models, risk premiums, return expectations, investment processes, and discerning client behaviour. Coupled with this, there are additional challenges stemming from the field of regulation.
The media conference held by the Alternative Investment Council of the SFAMA in Zurich on 23 October was devoted primarily to the development of alternative investments since the financial crisis triggered by the credit market. The focus was on the hedge fund and private equity segments.
Significance of hedge funds
Hedge funds account for just 2% of the asset management market, but deliver a whole range of key functions for this market, such as increasing liquidity, ensuring efficient capital allocation, and driving innovation. They also offer investors opportunities for managing risks and for diversifying their portfolios. Worldwide, the volume of hedge funds has increased by 25% since the 2008 financial crisis, rising from USD 2,000 billion to just under USD 2,500 billion by June 2013. The majority of hedge fund investors are institutional, who account for 57% of this market compared with 45% prior to the financial crisis. This trend is expected to continue.