Wanted: Alternative investments

The Middle East continues to experience unprecedented interest in alternative investments as regional institutional investment in hedge funds is expected to surge to $140 billion, or 14% of the total $1 trillion forecasted institutional investor capital in hedge funds by 2010, according to a report by the Bank of New York. The report said global institutional investor capital in hedge funds will increase from around $360 billion today to more than $1 trillion in 2010, and institutional investors will account for more than 50% of the total flows. On this premise, the Middle Eastern institutional investors will increase their exposure to worldwide hedge funds almost five times from around $29 billion today, mainly because the willingness of regional institutions to invest in hedge funds will outpace the expected near tripling of the industry portfolios. While noting that the vast majority of institutional investors worldwide – Bank of New York estimates