New York—November 12, 2007—Hedge funds manage external research more proactively than long only managers, according to a study released by Integrity Research Associates. Hedge funds review their external research more frequently than long only investment managers, are three times more likely to seek assistance finding external research, and are much less confident that they have already found the best sources of external research.
“Our study confirms that hedge funds are more aggressively seeking out new sources of research than long only managers,” says Michael Mayhew, Integrity’s chairman and author of the study. “Long only managers are complacent about external research whereas hedge funds are continuously looking for what’s new and innovative.”
Conducted in October, 2007, the survey polled forty-three research directors at US based hedge funds and long only institutional investors. The survey focused on how institutional investors source and value external research. Highlights from the study include:
- Forty-two percent (42%) of hedge funds evaluate their portfolio of research providers at least monthly compared to five percent (5%) of long only managers.
- Hedge funds are three times more likely to use external sources to identify research, with forty-five percent (45%) of hedge fund research directors using outside sources compared to thirteen percent (13%) for long only directors of research.
- Thirty percent (30%) of hedge funds were either Not Too Confident or Somewhat Confident that they are using the best external research available compared to eighteen percent (18%) of long only managers.
“As long only managers introduce more alternative product like 130/30 funds, they are talking the talk, but our survey suggests that they are not yet walking the walk,” adds Mayhew.
For a more detailed look at Integrity Research’s survey go to:
A Tale of Two Buy-Side Investors – Part 1
A Tale of Two Buy-Side Investors – Part 2
or contact Matt Bannister at 212.845.9088 x6851 or Matt.Bannister@integrity-research.com
About Integrity Research:
Integrity Research Associates, LLC is the only research firm focused on the fast-moving investment research industry itself. Integrity Research’s analysts cover 1,500 research firms and other sources of investment research in the U.S., Europe and Asia, collecting information on performance, analytic resources, business strength, research style, coverage and potential conflicts. Integrity’s clients are research directors, analysts and portfolio managers within money management firms and hedge funds. Additional information about Integrity can be found at www.integrity-research.com
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