Kai Vaughn

Though fund managers face a demanding client base in insurers, which require much more transparency and detailed reporting than other institutional investors, the insurance marketplace still is new enough to hedge funds that managers may see few competing peers, says the report from Patpatia & Associates. That could mean opportunities for forwardthinking hedge fund managers. “It’s still a comparatively underserved market,” says Bill Limburg, senior associate at Patpatia. “We believe there is room for firms that take a more solutionsbased approach to gain assets and share.”

The report outlines how insurers pulled back from hedge funds in the wake of the 2008 financial meltdown, but then “steadily rebounded.” Insurance company assets invested in hedge funds totaled $11.1 billion in 2009, but nearly doubled to hit $21.1 billion by 2013, the most recent year data was available. Insurance companies have traditionally invested almost all of their general account assets in fixed income securities, though many have been slowly adding equities in recent years and, even more recently, alternatives. Especially in the low yield postcrisis environment, some insurance companies see hedge funds as a way to get a little extra alpha, though most observers say it’s mainly about gaining diversification.

Insurers are also raising their exposure to other alternatives, notably private equity, but not by as much: allocations to hedge funds “have grown at an 11.4% CAGR from 2008, surpassing private equity allocation growth in the same time period” of 8.9%, the report says. Multistrategy “remains the most popular choice” for insurers, with 32% of investors holding such funds, according to Patpatia’s report, though this figure is down from 43% in 2008. Secondmost popular is longshort equity, although this too may not be as dominant: “Some [investors] expressed that it will not be their preferred focus moving forward,” the report says.

Deal Management Team Will:

• Jumpstart the fundraising process by syndicating company or asset-specific co-investments to new LPs either as part of a fundraising or prior to a fund launch
• Syndicate co-investments to initiate LP relationships in advance of a fundraising for GPs between fundraisings or prior to launching a first fund
• Place direct investments by private investors in companies or assets
• Source capital for company-specific growth or acquisitions
• Identify real estate joint venture capital

ROY ZUCKERBERG
Chairman
Mercury iFunds Board of Advisors
Former Vice Chairman
GOLDMAN SACHS GROUP

DAVE BARRETT
Managing Director
FORT MANAGEMENT, LP

RONALD BLAYLOCK
Founder and Managing Partner
GENNx360

HENRY BREGSTEIN
Global Co-Chair of Financial Services
KATTEN MUCHIN ROSENMAN LLP

JOHN CADEDDU
Managing Director and Partner
DAG VENTURES

MICHAEL D. FASCITELLI
Managing Partner and Co-Founder
THE IMPERIAL COMPANIES
Former CEO
VORNADO REALTY TRUST

ROBERT M. FELL
Co-Founder and Former CEO
PRICELOCK, INC.

GAIL MACKINNON
Former Executive Vice President
TIME WARNER CABLE

ANDREW WHITE
Founder
BROOKLAWN INVESTMENT PARTNERS

As a full service placement agent, Mercury Capital Advisors provides each client with a customized and highly coordinated approach to the fundraising process

Deal Management team will:

• Develop and implement a targeted marketing strategy tailored to the unique needs of each GP with focus on suitable LPs
• Assist or advise in the preparation of marketing materials including flipbook, due diligence materials and PPM
• Profile prospective investors with GP prior to meeting
• Collaborate in the management of responses to DDQ requests
• Manage all aspects of the roadshow including optimizing travel and meeting logistics to ensure an efficient and effective process