Four Hedge Fund Trends To Watch For In 2014

Hedge funds with the strongest brands should rake in investor cash this year, according to a report out today from hedge fund consultancy Agecroft Partners.

1. The strongest brands will see the highest investor flows.

The Agecroft Partners report says that brands will matter more in the coming year, as investors will look beyond just the largest funds for money management options. Offering a high quality fund, clearly articulating the unique advantages of investment, and showing strong market penetration will get a fund ahead with investors.

2. Many new investors will be out of luck.

Since a large number of investor assets are flowing into a small percentage of hedge funds, many of these funds have reached the capacity they've identified as the optimum asset levels for return potential. This means that new money will be off the table, especially from those trying their luck in the hedge fund world for the first time.

3. Fees, on average, will decline.

If you do manage to get your money into a hedge fund in 2014, the fees you'll be charged will likely be down over last year on average, Agecroft believes. This will mostly apply to larger institutional investors, however, as they've pushed hedge funds to lower fees as returns have been on the decline in recent years.

4. Those funds with a specific, niche focus will see the most money coming in from investors.

The hedge funds that will do the best this year will have to focus on two things in particular — investor type and investment type. Honing in on a specific set of investments and/or a type of person or group investing in the fund are the keys to success in 2014.

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