The role of the classic diversified multi-manager
Thorkild Juncker, partner at NewFinance Capital Partners, looks at the long-term benefits of investing in hedge funds in a carefully constructed multi-manager vehicle
Over the last five to 10 years, funds of hedge funds (FoHFs)have been a core feature of the industry as a way to access diversified portfolios of hedge funds. They continue to be the vehicle of choice for both first-time investors, as well as for the more sophisticated hedge fund buyers that now want more specific portfolios but still prefer the multi-manager route.
As the hedge fund industry has evolved, so has the hedge fund investor. And although many predicted that this development would lead to the eventual demise of the fund of hedge funds industry, quite the reverse seems to have happened so far, with annual fund of funds asset growth rates averaging 30% over the last five years.