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Thirteenth Annual Global Hedge Fund Investor Survey 2013
Goldman Sachs Prime Brokerage
Prepared by Goldman Sachs Prime Brokerage. In evaluating this
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WL0944 - 13th Annual Global Hedge Fund Survey Cover Final.indd 1-2 02/05/2013 14:57:31
This is NOT the full report.
This document comprises only
selected highlights of the survey
findings. If you would like
to request a full copy of the survey,
please see the last page.

2. Securities Division | Prime Brokerage
Global Hedge Fund Investor Survey 2013
26%
8%
7%
8%
8%
 2013 marks the 13th year of our Global Annual Hedge Fund Investor Survey and, as in prior years, the breadth and diversity
of both responses and respondents provides insight into a continuously evolving industry.
 This year’s survey incorporates responses from 730 distinct investor groups globally, representing around $1.4 trillion of
assets invested directly in hedge funds. As in prior years, responses were analysed to eliminate double-counting of assets
(for example, when looking at the invested assets reported by Consultants as well as their underlying investors) to provide
the most accurate assessment of how and where capital is being deployed.
 Arguably the most significant trend that continues to manifest itself is the institutionalisation of the buyer base for hedge
funds. This year, institutional investors such as Pension Plans, SWFs* / Corporate Treasuries, Insurance Companies,
Endowments / Foundations and their Consultants have grown to represent 47% of hedge fund buyers by assets, compared
to 40% as recently as a year ago, and less than 20% in 2008.
Breakdown of Responses
* Throughout the document, SWF stands for Sovereign Wealth Fund.
** Other Europe comprises Austria, Germany, Italy, The Netherlands, Portugal and Spain.
By
Type
By
Location
Institutional Capital:
Managed Account
Platform 1%
Institutional
Capital
47%
Private
Capital
17%
Fund of
Funds
35%
By
AUM
10%
7% 3%
9%
3%
4%
24%
5%
Managed Account
Platform 1%
Institutional
Capital
32%
Private
Capital
34%
Fund of Funds
33%
By
# of
Respondents
Institutional Consultant / Advisor
Insurance Company
Private Capital: Private Bank Family Office
Pension Plan
SWF / Corporate Treasury Endowment / Foundation
High Net Worth Consultant / Advisor
Europe:
17%
10%
5%
2%
1%
4%
4% 2%
By
AUM
Americas
55%
Asia-Pacific 6%
Europe /
MENA
39%
15%
10%
3%
2%
3%
10%
6%
3%
By
# of
Respondents
Americas
48%
Asia-Pacific 8%
Europe /
MENA
44%
UK Switzerland Middle East France Scandinavia Other Europe**
Asia ex-Japan JapanAsia-Pacific:
1%
2%
4%
Introduction

3. Securities Division | Prime Brokerage
Global Hedge Fund Investor Survey 2013
Investor Universe
 Respondents: 730 investors representing $1.4 trillion in assets invested directly in single manager hedge funds.
 Geographic Split: 55% of respondents by AUM from the Americas, 39% from Europe / MENA and 6% from Asia-Pacific.
 Investor Split: 47% Institutional Capital, 35% Fund of Funds and 17% Private Capital.
Industry Trends and Developments
 Industry Growth: The hedge fund industry grew by 12%* in 2012 (2%* excluding performance gains) and allocators expect
the industry to grow a further 8% in 2013. However, they expect on average to grow their own assets by 11%.
 Institutionalisation of the Industry: Institutional direct allocators, who represented less than 20% of the industry at the
end of 2008, rose to 47% at the end of 2012.
 Growing Importance of Advisors / Consultants: 60% of Pension Plans and 45% of Insurance Companies stated they
use Advisors / Consultants.
 Highest Ever Concentration of Hedge Fund Assets Managed by the Largest Allocators: Investors with over $10 billion
AUM represent 46% of global hedge fund assets, the highest our survey has ever recorded, and up from 39% at YE 2011.
 Fees: Survey respondents said 83% of their investments in 2012 were made on full fees instead of individually negotiated
fees. The average fee level across allocators’ hedge fund portfolios is 1.65% management and 18.3% performance fees.
 Return Expectations: For 2013, investors on average are targeting returns of 9.2% for their hedge fund portfolios.
Insurance Companies target the lowest returns at 6.6%, while for the second year running, Family Offices have the most
aggressive expectations for their hedge fund portfolios, stating targeted returns of 10.4%.
 New vs. Existing Investments: Allocators are planning to deploy approximately half of all net inflows into managers they
are currently invested with. This figure has gradually been declining over the years (in 2005, approximately two-thirds of
inflows were being earmarked for existing investments).
Strategy and Geographic Appetite
 Equity Long / Short managers continue to represent around a third of a typical allocator’s portfolio, with the weighting
expected to increase during 2013. Family Offices and Funds of Funds are most overweight this strategy relative to the
average investor portfolio, while Pension Plans and SWF / Corporate Treasury investors are most underweight.
 Event Driven strategies are expected to feature more prominently in investors’ portfolios over the course of 2013, with
investors expecting their allocation to rise from 9% at the end of 2012 to 10% at the end of 2013.
 Geographic Allocation: 43% of the average investor’s portfolio is allocated to managers focused on the US / Canada
markets and 25% is allocated to managers with a Global mandate. In 2013, investors plan to increase exposure to Asia and
Europe.
Portfolio Construction and Allocation Process
 Cash Levels: Cash levels in investors’ portfolios are now at a post-2008 low of 5.8%, less than a third of their peak levels
last seen in the first quarter of 2009.
 Turnover: Turnover of hedge fund investments is around 16% on average, below pre-crisis (2006-2007) average levels for
the first time since 2008.
 Liquidity of Hedge Fund Investments: Close to 80% of assets deployed by investors are currently invested in funds with
quarterly or shorter liquidity after the expiry of any initial lock up period. This compares to 93% at the end of 2011.
 Allocation Process: In 2012, the majority of allocators met over 100 managers that they were not currently invested with
and 70% of investors subsequently allocating to 5 or fewer managers during the year.
 New Allocations: Over a third of new allocations were smaller than $5 million, while 11% of respondents pointed to their
average allocation size being $50 million or more in 2012.
 Minimum AUM: 53% of the investors stated they require a minimum AUM in a fund before they can allocate. Interestingly,
the average minimum AUM requirement fell for the first time since 2003, and currently stands at $226 million (down from
$237 million in 2011).
 What Matters Most? Over 80% of respondents stated that Independent Valuation Agents, a Long Term Track Record and
Counterparty Risk Provisions were “Very Important” or “Important” considerations in positively influencing their allocation
decisions.
Alternative Investment Structures
 Managed Accounts: 32% of allocators deploy capital through managed accounts, and this is expected to increase to over
40% over the course of this year.
 UCITS: 59% of European based allocators also invest in UCITS hedge fund managers. 63% of UK respondents are also
UCITS buyers, while this figure is over 80% for Spanish, Italian and French investors.
 40 Act: 24% of Americas-based investors tell us they currently do, or are planning to, allocate to hedge funds in a 40 Act
structure.
* Source: HFR Global Hedge Fund Industry Report 2012.
Survey Highlights

4. Securities Division | Prime Brokerage
Global Hedge Fund Investor Survey 2013
Focus on: Institutions Continue to Drive Incremental Demand 1
Focus on: Fees 3
Growth Among Investors: Who, Where and How? 5
I. Growth Rate Expectations 5
II. Investor Asset Concentration 7
III. Source of Capital for Intermediaries 8
IV. Liquidity of Source Capital 8
A. Recent Evolution 8
B. Liquidity of Current Source Capital 9
What Strategies are Investors Allocating to? 11
I. Strategy Allocation 11
A. Strategy Allocation 11
B. Changes in Strategy Allocation 13
C. Appetite for Sector-Specific Equity Long / Short Strategies 14
II. Regional Allocation 15
A. Current Allocation 15
B. Changes in Regional Allocation 15
How Do Investors Construct their Portfolios and Manage their Return Expectations? 17
I. Current Portfolios 17
II. Historical Returns 19
A. Average Net Return in 2012 19
III. Return Expectations 20
A. Investors’ Expectations from their Hedge Fund Allocations 20
B. Target Net Return for 2013 20
C. Benchmarking 22
IV. Portfolio Turnover 23
V. Redemption Activity 24
VI. Cash Levels 26
Understanding the Allocation Process 27
I. New vs. Existing Investments 27
II. Allocation Process 28
III. New Allocations by Size and Track Record 29
IV. Investing with Recent Launches 30
V. Minimum AUM Requirements 32
VI. Liquidity and Gates 33
A. Liquidity of Allocations (after Lock-Up Period) 33
B. Willingness to Allocate to Funds with Gates 34
C. Appetite for Different Types of Gates 34
VII. What Matters Most to Investors When Considering an Allocation 35
Alternative Investment Structures 37
I. Allocation Through Managed Accounts 37
II. UCITS 38
III. 40 Act 38
Acknowledgement and Disclaimer 39
Table of Contents

5. Securities Division | Prime Brokerage
Global Hedge Fund Investor Survey 2013
For a full copy of the survey please contact:
 Americas: andrew.duckworth@gs.com
 Asia: wan.wang@gs.com
 Europe: lauren.singers@gs.com
Please note distribution of the full document is restricted
to clients of Goldman Sachs Prime Brokerage and Investors
who completed the survey.

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