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Matthias Knab reports from the third day of the Geneva GAIM Invest conference: All panelists of the European institutional investor panel said hedge FOFs add value and that they will stick to investing with them. Christoph Manser, CIO of insurer owned Winterthur Asset Management explained they started in 2000 to invest in FOFs. Now his team has four experts and also started direct hedge fund investments. Manser said direct investments result in an optimum proximity to the hedge fund space and makes it more transparent. However he sees FOF investment will continue to be an important pillar in institutional asset allocation.

Parallel investing, in FOF and direct investment into single managers, makes sense for a number of reasons. He sees institutions building core portfolios with “blue chip” hedge funds and specialised FOFs will add value to cover certain areas like opportunistic strategies or areas and styles that require a higher diversification. Access to closed FOFs was mentioned as another important advantage of FOFs. Andries Nieuwland, member of the investment committee of Dutch Stichting Fonds Schiedam-Vlaardingen added FOFs will continue to experience growth, there is “nothing for them to worry about”.

James Walsh, head of Economic and Strategy at Hermes Pension Management reported on the $1bln allocation to hedge funds, which was made just about three weeks ago. This investment was mainly done for diversification reasons. About two years ago the trustees of th......................

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