Why pay top dollar to analyze companies but not to analyze managers?
By Neal Berger
It has become quite fashionable these days to dismiss fund of funds as providing little value to the investor while simply adding an extra layer of fees. To be sure, this is absolutely true in many cases. However, it is a major fallacy in others.
A fund of funds manager should actually be considered a portfolio manager of hedge funds. Investors think nothing of hiring a portfolio manager to select, monitor, size, and manage the risk of a portfolio of equities or