The number of hedge funds available to investors has grown hugely over the last ten years. Many underlying strategies are now widely recognised, such as relative value arbitrage, directional trading, merger arbitrage and trading in distressed securities. However, Individual funds can carry a high level of market risk, can frequently have high barriers to entry for investors and can be structurally complex and opaque.

We manage this asset class through external funds of hedge funds, which employ a multi-strategy approach. This exposes our clients to a wide range of talent with what is expected to be a low correlation to conventional equity and bond markets. Funds of hedge funds typically hold around 35 different hedge funds that are often only available to institutional investors or extremely wealthy private investors. We select funds of hedge funds managers with good long-term track records and have negotiated lower initial entry amounts and lower fees on behalf of our clients.

Managers of fund of hedge funds often target returns of between 6% and 10% per annum, whilst seeking to maintain a similar risk profile to defensive bond instruments. They also aim to avoid making losses as a primary objective.



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