Family offices increasing their interest in hedge funds, per survey

The appetite for family offices investing in hedge funds will grow over the next year, according to survey results released last week.

More than half of 555 investment-fund allocators — composed mostly of single- and multifamily offices and funds of funds — said they would be increasing their investments in hedge funds over the next year.

Of those, 44% said their investments would increase by at least 10% or more, according to those surveyed by iConnections, a financial technology platform.

About two-thirds of allocators said they were either optimistic or very optimistic about hedge funds. They were especially keen on investing in global macro- and multi-strategy funds, the survey found.

Overall, hedge funds were down 2.4% in 2022. But that compares favorably with global equities and bonds — which were down 20% and 16.7%, respectively, over the year. 

"We have been increasing our allocation to hedge funds as well as other alternative investments over the past 2½ to three years," said Thomas Ruggie, CEO of Destiny Family Office in Winter Park, Florida. The Destiny Alternative Fund's portfolio is 69% hedge funds and 25% private equity due to the long-term performance and risk measurements "of underlying managers compared to broad market indexes."