Sector Analysis, the investment research company, has added its rosy view to predictions about hedge fund growth with its estimate of five-fold growth in the European institutional appetite for hedge funds in the coming years.

According to the company's survey, based on interviews with European investment decision makers, hedge fund holdings will increase by $182bn (€203.7bn), to $220bn from $41bn currently. The most significant growth will be from current users of hedge funds, but growth will also come from new investors. The current figure is comparable to where the US stood in the early 1990s.