A new survey from Citi Prime Finance Survey indicates that retail alternative investments is expected to triple to nearly $1 trillion by 2017.
Citi Prime’s annual hedge fund industry trends report, “The Rise of Liquid Alternatives & the Changing Dynamics of Alternative Product Manufacturing & Distribution,” attributes the growth forecast to increased transparency among hedge funds, “new flexibility for mutual fund and exchange-traded fund (ETF) providers and new demands from wealth managers and broker-dealers who want to add alternatives to more mainstream portfolios."
According to the survey, retail participation in mutual funds and ETFs currently stands at $259 billion in the U.S. with new demands pushing assets in these vehicles to $770 billion by 2017. However, new demand for liquid UCITS-structured products globally and forecasted growth in retail assets moving into hedge funds would push the total retail investment in the alternative industry to $770 billion by 2017.
Another key finding from the survey reveal that respondents now view hedge funds as being “shock absorbers,” offering insurance against losses in their portfolio.
A subsidiary of Citigroup, Citi Prime Finance interviewed 82 investment industry professionals including hedge fund managers, asset managers, private equity firms and pension funds in the U.S., Europe and Asia, representing $336 billion in hedge fund assets and $5.6 trillion in overall assets.