Although funds of hedge funds still account for the
lions share of the market, there are changes afoot that
could well see them having to work harder for their
Italian funds of hedge funds are clearly the dominant
players in the domestic hedge fund industry. Approximately 206
funds of funds (including cloned versions) account for around
94% of the overall market share. For the most successful firms,
growth has been rapid in recent years, while the top 10 players
have all crossed the 1 billion asset hurdle.
One feature of the Italian market is that investors
typically request funds with different risk profiles, rather
than strategy-specific funds. As Italian investors have
traditionally demanded lower-risk products, low-volatility
funds of funds account for just over one half of total assets.
The remainder of the market comprises medium-volatility (32.5%)
and high-volatility (10.8%) funds of funds. And, within this