Opinion

Don't dismiss funds of funds

by

Why pay top dollar to analyze companies but not to analyze managers?

 Neal Berger of Eagle’s View Capital Management
 

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