Tuesday, July 22, 2008

Fund of Hedge Fund and its benefits

What is a Fund of Hedge Funds?

-A diversified portfolio of generally uncorrelated hedge funds.
-May be widely diversified, or sector or geographically focused.
-Seeks to deliver more consistent returns than stock portfolios, mutual funds, unit trusts or individual hedge funds.
-Preferred investment of choice for many pension funds, endowments, insurance companies, private banks and high-net-worth families and individuals.
-Provides access to a broad range of investment styles, strategies and hedge fund managers for one easy-to-administer investment.
-Provides more predictable returns than traditional investment funds.
-Provides effective diversification for investment portfolios.

Benefits of a Hedge Fund of Funds

-Provides an investment portfolio with lower levels of risk and can deliver returns uncorrelated with the performance of the stock market.
-Delivers more stable returns under most market conditions due to the fund-of-fund manager’s ability and understanding of the various hedge strategies.
-Significantly reduces individual fund and manager risk.
-Eliminates the need for time-consuming due diligence otherwise required for making hedge fund investment decisions.
-Allows for easier administration of widely diversified investments across a large variety of hedge funds.
-Allows access to a broader spectrum of leading hedge funds that may otherwise be unavailable due to high minimum investment requirements.
-Is an ideal way to gain access to a wide variety of hedge fund strategies, managed by many of the world’s premier investment professionals, for a relatively modest investment.

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