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Emerging Hedge Fund Manager Sentiment Survey Reveals Expectations for 2007
VanthedgePoint Releases Results of its 2nd Annual Survey
NEW YORK, NEW YORK, January 23, 2007 – VanthedgePoint Group, Inc., an integrated financial services firm catering to emerging hedge funds, today announced the results of its second annual Emerging Hedge Fund Manager Sentiment Survey.
Emerging hedge fund managers indicated they are largely "neutral" on the U.S. economy (57.4%) and the U.S. equity markets (44.3%) for 2007. Approximately one-third are "bullish" on the economy (32.8%) and "bullish" on U.S. equities (37.7%). They believe a continued "Real state market slowdown" (29.5%) and "inflation" (21.3%) will play the biggest role in how the U.S. economy will fare this year.
When asked where to invest in the U.S. stock market, survey respondents said that Technology (41.0%), Financial Services (31.2%), Consumer Goods (26.2%), Food & Beverage (21.3%) and Defense (21.3%) will be the best performing sectors in 2007, and that Automotive (32.8%), Real Estate (27.9%), Energy (21.3%) and Home Building/Furnishing (21.3%) will be among the worst performers. Among U.S. equities, emerging hedge fund managers believe "large cap" stocks (36.7%) will perform the best in 2007, followed by "small cap" stocks (33.3%). Internationally, they expect China (34.4%) and Japan (34.4%) to be the top performers along with Eastern Europe (23.0%), and that Latin America (37.7%) and Russia (23.0%) will be the worst places to invest in 2007.
"U.S. equities" (44.3%) are expected to be the best asset class of 2007, followed by "International equities" (31.2%), while sentiment about which asset class will perform the worst in 2007 was almost evenly split among "Real estate" (27.9%), "High yield debt" (24.6%) and "Commodities" (21.3%).
Over half of all respondents manage hedge funds with less than $10 million in assets under management, while over 85% currently manage less than $100 million. Over 90% are located in the U.S., and nearly one-third have both onshore and offshore vehicles for investors. In addition, emerging hedge fund managers indicated that the most difficult aspect of running a hedge fund business is "raising capital/marketing" (70%).
One notable finding was the significant increase in usage of index products among emerging hedge fund managers. Over 62% of respondents said they use index products in their portfolio in 2007, and another 8% said they were considering using them. That compares with only 44% of respondents using index products in 2006.
In 2006, the Emerging Hedge Fund Manager Sentiment Survey results turned out to be quite accurate. Last year, respondents predicted increasing energy costs and a real estate market slowdown, both of which slowed the U.S. economy in 2006. They correctly predicted that Technology, Raw Materials, Financial Services and Defense would be among the top performing sectors in the U.S., and they narrowly missed the mark by indicating China would be the best performing international market.
"The results of our second annual Emerging Hedge Fund Manager Sentiment Survey provide unique insight into the minds of emerging hedge fund managers," said Geoffrey M. Tudisco, chief executive officer and founder of VanthedgePoint Group, Inc. "Academic studies indicate that early-stage hedge funds tend to outperform larger funds, and our survey allows us to better understand these managers' point of view when it comes to making investment decisions."
VanthedgePoint launched in the second quarter of 2006, with the goal of leveling the playing field between smaller emerging hedge funds and their larger multi-billion brethren. VanthedgePoint employs a patent pending business model to create economies of scale that result in improved operational efficiencies and lower costs for its clients. The result is a hedge fund that has lower operational risk and a reduced cost structure, which makes it more attractive to potential investors. Starting with U.S. equity execution, VanthedgePoint soon added U.S. options execution to its integrated platform. Now, VanthedgePoint offers customers a comprehensive solution that includes U.S. and international equities, options and futures execution along with equity finance and operations outsourcing.
About VanthedgePoint
VanthedgePoint Group, Inc., is an integrated financial services holding company focused on delivering products and services to empower emerging hedge funds. VanthedgePoint Group operates three wholly owned subsidiaries: VanthedgePoint Securities LLC, a registered broker/dealer (Member FINRA/SIPC), VanthedgePoint Futures LLC (Member NFA) and VanthedgePoint Technologies LLC. VanthedgePoint Group is a privately held company with principal offices located in New York, NY. Additional information about the firm is available at www.vanthedgepoint.com.
Media contact:
Geoffrey M. Tudisco
Chief Executive Officer
VanthedgePoint Group, Inc.
(212) 514-8639
info@vanthedgepoint.com
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