Western Europe and Japan are the most sought-after regions for hedge fund investors in 2014 as economic conditions show signs of improvement for the two regions, according to Deutsche Bank's annual Alternative Investment Survey (AIS).
The AIS, taken by 413 global hedge fund allocators representing $1.8 trillion assets under management, revealed that 36 percent of investors were planning to add to Europe, while Japan was the second most popular region, up nine places from last year, with 29 percent hoping to increase their Japanese exposure.
The uptick in interest reflects the increasingly positive data from both regions. The euro zone economy grew faster than expected in the fourth quarter of 2013 amid signs of a narrowing gap between the region's strongest and weakest members.
Japan has seen an improvement in fortunes since the onset of "Abenomics" last year.Although the country's economy grew 0.3 percent in the fourth quarter of 2013 from the previous one, below analysts' expectations in a Reuters poll, it did mark the fourth straight month of expansion.
The AIS also showed that 53 percent of investors were planning on focusing on fundamental equity long/short and event-driven strategies for the year ahead, while structured credit and credit were the least popular.