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With more research and available products, hedge fund replication and alternative beta is catching on. Credit Suisse / Tremont for example believes that "replication is a natural extension of indexing". Matthias Knab reports "live" from the IRC "Hedge Fund Replication and Alternative Beta" conference in Geneva:

Fung: Hedge fund replicators not to replace hedge funds, what`s behind the Black Swans Prof. Bill Fung, BNP Paribas Hedge Fund Centre, London Business School started his "Brief history of hedge fund replication and the origins of alternative beta" introduction with likewise brief definitions, saying that alternative alpha is people investing, and alternative beta is strategy investing as "matured, rule-based strategies whose returns are cheap to replicate"

Fung said replication strategies are not here to replace hedge funds or hedge fund managers. He defines them as a "class of strategies to supplement the existing strategies available to investors".

Risk management, modeled from real hedge funds must be integrated Taking a look at the dynamics of hedge fund replication, Fung said it is imperative for hedge fund replicators to include risk management skills, and not only look at asset classes and strategies. Replicators have to "look at hedge fund managers" and integrate best practice risk management, taking into account liabilities created by l......................

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