Appetite for alternatives

Among the array of products that has sprouted from the fast-growing hedge fund universe is the investable index, which, with its specific criteria for fund selection, widens the asset allocation options for investors in alternative classes.
Strong growth within the hedge fund industry continues, with the number of hedge funds rising fivefold in the past decade to amount to more than 6000 today. Hedge fund assets are now at an estimated high of $700–750bn worldwide.
The bursting of the technology bubble in 2000 highlighted the limitations of long-only investing and increased the appetite for investments that generally exhibit low correlation to equities.
As a result, institutional investors, including pension funds and endowments, are showing a growing interest in exploring the role of hedge funds in their strategic asset allocation.