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Hennessee Releases 7th Annual Hedge Fund Investor Survey; 55% of Hedge Fund Investors Will Increase Their Hedge Fund Investments.

NEW YORK, July 6 /PRNewswire/ -- The Hennessee Hedge Fund Advisory Group ("Hennessee Group LLC") today announced the results for its Seventh Annual Hennessee Hedge Fund(R) Investor Survey. The Survey results indicate that hedge funds met or exceeded expectations for 88% of hedge fund investors. This, in addition to the 34% growth in industry assets from $592 billion to $795 billion, indicates hedge funds are growing in use for portfolio diversification and downside risk protection. The 34% growth is the hedge fund industry's largest dollar increase and third largest percent increase since the Survey began in 1998.

Hedge funds, which typically invest on market fundamentals, were hindered by the liquidity driven conditions that defined 2003. The Hennessee Hedge Fund Index(R) finished up +19.69%. In comparison, the S&P 500 finished up +28.55%, the Dow Jones rose +25.33%, and the NASDAQ increased +50.01%.

"The industry has matured since my first introduction to hedge funds in 1980 and investors are becoming far more comfortable with hedge funds as an asset class," says Elizabeth Lee Hennessee, Founder and Managing Principal of Hennessee Group LLC. "Someday, we believe it will be considered imprudent not to include hedge funds within a stock and bond allocation," added Ms. Hennessee.

Other relevant findings from the Hennessee Hedge Fund(R) Investor Survey include:
 * Since the beginning of 2000, the hedge fund industry has grown by 145%,
 from $324 billion to $795 billion.
 * 62% of endowments that invest in hedge funds expect to increase their
 hedge fund allocation.
 * The average hedge fund investor continues to have approximately 30% of
 their investable net worth allocated to hedge funds.
 * 62% of hedge fund investors use a formal allocation process for their
 traditional investments, however, only 49% use a formal allocation
 process for their hedge fund investments.
 * 42% of investors use a consultant for their hedge fund investments, a
 68% increase from 1999.
 * The hedge fund style most frequently chosen by investors was
 distressed, appearing in 63% of hedge fund portfolios, followed by
 event driven (56%) and convertible arbitrage (55%).
 * Hedge fund investments are being funded out of traditional, long only
 investments. 70% of individuals/family offices that invest in hedge
 funds use them in place of traditional, long only investments.

The Hennessee Group LLC conducts its Annual Hennessee Hedge Fund(R) Investor Survey to analyze investors' preferences towards hedge funds and understand the underlying factors that affect investor decisions. For more details and/or questions on the Annual Hennessee Hedge Fund(R) Investor Survey, please contact Alexander Smith-Ryland of the Hennessee Group at (212) 857-4444 or via email at

About Hennessee Group LLC

Hennessee Group LLC is a Registered Investment Adviser that consults hedge fund investors on asset allocation, manager selection, and ongoing monitoring of hedge fund managers. Hennessee Group LLC is not a tracker of hedge funds. The Hennessee Hedge Fund Indices(R) are for the sole purpose of benchmarking individual hedge fund manager performance. The Hennessee Group does not sell a hedge fund-of-funds product nor does it market individual hedge fund managers.

CONTACT: Press - Alexander Smith-Ryland of the Hennessee Group LLC, +1-212-857-4444,

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Geographic Code:1USA
Date:Jul 6, 2004
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