The growth of alternative investment has been considerable in recent years. For both institutional and private investors, it seems that alternative investment now constitutes a distinct class within their overall asset allocation.
A recent survey of institutional investors carried out by Goldman Sachs and Frank Russell1 revealed that the respondents invested more than 1.7% of their assets in hedge funds in 2001 and plan to increase the investment to 3.4% for 2003. More generally, the year 2001 represented a record year for investments in hedge funds, bringing together more than 30 billion dollars.
In Europe, the alternative investment industry experienced a growth rate of 60% in 2000 and 40% in 2001 and the major asset management firms and institutional investors are forecasting a long-term (5-year) growth rate of more than 20%.
In a relatively difficult context for the asset management industry, the alternative class (cf. Appendix 1 for a short description of the main alternative strategies) represents a commercial eldorado. This attractiveness is reinforced by the difficult stock market situation, which increases investors' interest in investment services that base their strategy on the decorrelation with the risks and returns of the financial markets and therefore the search for an absolute return.
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