Rich people have trillions of dollars they want to give to hedge funds

"Private wealth - which refers to money held on platforms run by the private banking divisions of places like Goldman as well as wealth advice giants like Merrill Lynch, independent advisors, and family offices - is eager to invest in hedge funds and has plenty of capital to put to work. Goldman's report estimates that less than $500 billion of the $50.7 trillion of private wealth assets are in hedge funds."

"If this segment of capital followed the recommendation of chief investment officers from these platforms and family offices for hedge fund exposure, there would be more than $4 trillion in hedge fund investments - close to the industry's total assets. "Even closing 10% of this gap would double the current assets" that private wealth has in hedge funds, Goldman's report states."

The $5 trillion hedge fund industry receives major backing from pensions, endowments, and sovereign wealth funds. Institutional investors face a cash squeeze because large amounts of capital are committed to illiquid private equity and venture funds, limiting new allocations to hedge funds. Private wealth totals roughly $50.7 trillion, yet under $500 billion is allocated to hedge funds. If private banks, wealth-advice platforms, independent advisors, and family offices adopted recommended hedge fund exposures, private wealth investments could exceed $4 trillion. Capturing a small portion of that potential would significantly expand hedge fund assets, and some large managers already target private wealth channels.

Read at Business Insider