Reflections on the decade from Europe’s oldest FoHF families
Mon Sep 5, 2011
LCH and Haussmann found the key to longevity is going where others fear to tread
By Niki Natarajan
Funds of hedge funds have been under fire for as long as
InvestHedge has been around, indeed probably before it launched
in October 2001. Rightly or wrongly, in the earlier part of
this decade the double layer of fees were the main bones of
funds of funds contention. Right now, 10 years on, the entire
business model is being called into question.
The loss of faith in funds of funds has happened for a
number of reasons. The first is simple evolution. A decade ago,
many investors wanted to invest in hedge funds and they bought
FoHFs as they had little knowledge or understanding.
Ten years later they are now savvier and want to try
investing directly. The stories of General Motors and the
California Public Employees Retirement System illustrate this
perfectly. To this day, CalPERS still works with funds of
funds, albeit in a different...
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