by Beverly Chandler, Opalesque London:
Robin Bowie, founder of Dexion Capital, a boutique investment bank focused on alternatives, is in defensive mode over the firm’s listed fund of funds (fofs) business, a sector he and his team pioneered in 2000. In its stratospheric rise through the bull markets to 2007/8, the fofs' landscape has changed for the best according to Bowie.
In an interview with Opalesque, Bowie said: "We are at the point where most investors are questioning whether hedge funds are the right way to run money because of the expenses that are involved in doing so and investors also question the funds of funds model because of the additional expenses involved in running funds of funds."
Bowie continued: "So fund of funds have had to rethink their business model and articulate where they add value. In manager selection; manager monitoring and de-selection; negotiation of fees and monitoring and managing risk. Constructing portfolios, managing portfolios; seeking opportunity set change and effective client reporting. Negotiating managed accounts with different objectives to the main fund in order that they can blend the fund of fund correctly." If all of these are done well, Bowie says that this is worth paying for.
Dexion’s two listed funds of funds are Dexion Absolute and Dexion Trading, both up 4.8% to the end of May this year but Dexion Trading is sitting on a discount between ne......................
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