A P: The growth of hedge funds

ivate equity/hedge funds (alternative investments) is driven by the need for a higher return to compensate for the expected lower returns from more conventional investment strategies focused on US bonds and equities.  There is also a clear desire among this investor base to be more focused on absolute-return strategies rather than relative return. Given the current level of allocations most of these large long-term investors have towards alternative investments, and their professed long-term target allocation, the flow of funds to these asset classes will remain strong.  One of the intriguing developments in the hedge fund world is the clear desire and ability of the newer funds to charge higher fees and impose more stringent terms on investors. No longer are funds charging a 1 per cent management fee and 20 per cent of profits