Opalesque | Big Hedge Funds Focus on Fragmented HNWI Population Through CAIS Platform
Opalesque | Kristen Bischoff
NEW YORK – July 22nd, 2011. High net worth and ultra high net worth individuals have been some of the longest and staunchest supporters of the hedge fund industry. The liquidity freeze at the start of the financial crisis, saw many hedge fund clients redeem assets due to their own cash requirements, and mainly led by fund of hedge funds. However, high net worth individuals' capital proved to be more sticky. In rebuilding their portfolios, many hedge fund managers sought a better balance between types of investors, and so HNWI have taken a back seat to institutional investors.
HNWI can represent a significant asset base for both large and smaller hedge fund managers, but in many cases the tradeoff between these investors and institutional investors is a matter of time and effort. The manager of a fund can spend time with a few institutional investors and gain a significant allocation, whereas the same string of multiple meetings with HNWI may only result in $2m-$10m allocations. The mismatch between fund managers soliciting HNWI clients is many times purely an issue of time constraints.
"One of the biggest problems for hedge fund managers trying to secure the high net worth universe is that it is a very fragmented area," says Rafay H. Farooqui, Co-founder & Managing Principal at CAIS. "We found that many in the wealth industry did not have a chance to invest into the hedge funds that they wanted to invest in," says Farooqui.
To read the full Opalesque article: Big Hedge Funds Focus on Fragmented HNWI Population Through CAIS Platform