Funds Of Hedge Funds

Wed Feb 1, 2006

Competing hard for distinctive niches

South African fund of hedge funds (FoHFs) managers inhabit a relatively intimate space. Their universe comprises about 15 firms, but only a few can claim to manage substantial assets. The other firms tend to be significantly smaller and many are likely to be searching for their first major clients. While the FoHFs investor base is generally high-net-worth individuals and institutions, the majority of FoHFs are looking to the pension funds to fuel their future expansion.

Of the 80 to 90 single-manager hedge funds that register on the radar screen for manager selection, only 60 are usually given any serious consideration. And, within that group, approximately 30 have a high profile and attract FoHFs attention. Jarred Glansbeek of RisCura, who advises many large pension funds, has performed an 'overlap' analysis to determine to what degree there is a commonality in manager selection. "Although there were some portfolios where the overlap level...

ISSN: 2151-1845 / CDC10004H

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