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Benedicte Gravrand, Opalesque Geneva: We further explore the apparent change in allocations in favour of single-manager funds by talking to two FoHFs managers. See part 1 here.

Penso: Investing directly could be painful as today’s environment does not forgive mistakes Jaime Shechter, managing director at New York-based FoHFs house Penso Capital Markets told Opalesque that a lot of changes were happening in the industry and that a paradigm shift in the hedge fund world was taking place.

“I believe that investing directly could be a painful mistake and even a dangerous trap for many investors, especially in today’s environment. Unless one has previous experience in managing money in any one specific hedge fund strategy under consideration, and unless one has access to the information that reveals what specific risks managers are taking (almost impossible to get in most cases), most investors, including the pros, simply lack the tools necessary to choose managers and make responsible investment decisions.

“Today, historical returns are worth a lot less they ever did and the emphasis on risk adjusted return on capital is key to survival. In an environment where true alpha is more allusive then ever, where the correlation between many hedge fund strategies is ex......................

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