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Tony Morrongiello Benedicte Gravrand, Opalesque Geneva:
Funds of funds’ image has suffered since late-2008, as many who had underlying funds offering different liquidity terms, found themselves unable to return money to investors while overall performance was diving. The Madoff scandal was also a blow, particularly for many who are based in Geneva, a center for the fund of funds industry.
Funds of funds (FoFs) must justify their existence as there is huge pressure on fees, on research efforts, on alpha generation – and besides, institutional investors are starting to hire their own asset allocators. The pressure is even higher now as most FoFs indices were down around 5% in 2011. Being contrarian is one way to succeed, as well as showing high conviction in underlying managers, investing in niche or small managers. That and other points such as the importance of being local, and the no-longer-valid model of using hedge funds right across the portfolio were discussed during the recent Opalesque Geneva Roundtable .
Running the extra mile
Fund of funds (FoFs) are increasingly finding it difficult to justify their existence, but, according to Tony Morrongiello, they can add value by knowing their managers properly and adding to the good managers when they are down and taking money away from them when they are up. Morrongiello is partner at the London-headquartered FoFs house Caliburn Capital. ...................... To view our full article Click here
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