One of the big four auditing and consulting firms in the world, EY discovered that one in four hedge funds will increase their exposure to cryptocurrencies in the coming year. According to the EY 2021 Global Alternative Fund Survey revealed that alternative fund managers are taking a stable place amongst investors’ portfolios slowly, and digital assets are also included, even if it is in a small way. This survey was put together by EY and it indicates the popularity and performance of alternative fund managers during the year among investors. According to the survey, it appears that hedge funds are the most open to adding crypto assets in their respective structures.
The survey also discovered that at least one in four of the hedge funds are looking into increasing their exposure to the crypto market in the next year. The year has been quite an interesting one for investors because of the global coronavirus pandemic and has had a number of challenges. While navigating through these challenges, alternative fund managers found a big opportunity. However, it is important to note that a majority of these fund managers are not in favor of cryptocurrencies right now, as only one in ten of them reportedly have exposure to digital assets. This shows there is some room for growth here.
Moreover, the funds appear to have had some good performance. 51% of the investors who participated in the survey reported that these alternative investments were able to deliver increased value and they had met or exceeded their expectations. These digital assets or cryptocurrencies have distinguished themselves as an important asset class and this has prompted fund managers and cryptocurrencies to turn their gaze to products that have proven to be relatively profitable in today’s convoluted markets.
While cryptocurrencies have not had a real involvement as major as other non-regulated assets, it is obvious that these digital assets are also carving their own niche rather quickly. It is also worth noting that they have managed to achieve this growth while dealing with an uncertain and unstable situation where traditional investments are concerned. This has obviously pushed investors into looking for ways to occupy new markets and use new strategies. These findings were made by the survey based on the conversations that included 54 investors and 210 managers. They provided an important glimpse into the future of alternative investments and the role cryptocurrencies could possible play in them.
The leader of the EY Global Hedge Fund Co, Natalie Deak Jaros, talked about the importance of the decisions that were made in this crossroads year. She said that this research is proof of the industry’s resilience and the key transformations that partners and managers are experiencing. She said that 2021 has proven to be a year in which investments were made in different initiatives in order to build momentum and these investments are likely to pay dividends for years to come. Cryptocurrencies have also generated significant returns and they are expected to give more in the future.