BNY Mellon Survey: HFs and SWFs Exert Strong Appeal

(October 26, 2010) — Companies worldwide are looking to lure greater investment from hedge funds and sovereign wealth funds while increasingly contemplating secondary stock listings in emerging markets, a new Bank of New York Mellon survey reveals.  

“This survey…has some interesting stats on how companies worldwide meet quite regularly with hedge funds and sovereign wealth funds, treating them now much like any other investor,” BNY Mellon spokesman Joe Ailinger told aiCIO. “We were also surprised that nearly a quarter of firms were considering a secondary stock listing in an emerging market, especially greater in China.”

According to the annual Global Trends in Investor Relations survey of nearly 400 companies from 47 countries, while 93% of companies met with hedge funds to discuss possible investment this year, compared to 89% in 2009, 47% met with sovereign wealth funds. Twenty-two percent are considering a secondary stock listing in high-growth markets, such as China and Hong Kong, to attract growing capital in those regions. Additionally, respondents revealed that major regions for investor opportunities over the next three years are North America (77%), Europe (70%) and Asia (48%).

Separately, Credit Suisse Group said earlier this week that hedge funds have fully recovered their peak in September, when the DJCS Hedge Fund Index was 1.2% over its previous peak in June 2008. During the financial crisis, the index, which measures overall hedge fund performance, fell as much as 19.5% from its the previous peak.

“The index showed that most funds have regained their high water mark on most of their assets. It is good news to investors who haven’t redeemed their assets,” Oliver Schupp, President of Credit Suisse Index Co., told the Dow Jones Newswires. “Compared to equities, hedge funds fared fairly well over the past two years.”