It has never been harder to assemble a credible fund of hedge funds team. Such is the growth in this fast-expanding asset class and in the underlying hedge funds themselves that there is an acute shortage of qualified analysts, portfolio managers and marketing specialists.
Inevitably the result is simple: the cost of hiring anybody with experience is rising rapidly, with established fund of funds companies furiously trying to poach experienced analysts from competitors.
As a result many top-rated analysts are now out of the price range of most startup funds of funds. Unless, of course, equity is on offer.
Happily people in other functions, such as risk control and operations management, are easier to find. If you are willing to be a little bit creative about where you look for your investment team they need not cost you an arm and a leg.
Overall, building a credible fund of funds...