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From Kirsten Bischoff, Opalesque New York:

Hedge fund investors of all types are allocating assets, according to New York-based investment manager Brownstone Asset Management. The firm, which recently reached $500m in assets under management, told Opalesque they have seen activity across the investor spectrum, but "the largest incremental growth in 2009 has been with fund of funds that cater to pension and endowment clients, as well as some endowments that have invested directly."

The Brownstone Partners Catalyst Fund specializes in long/short credit investing, and was launched five years ago with $28m by Portfolio Managers Doug Lowey and Oren Cohen. Achieving a five-year track record with no down years or quarters the firm expects to be able to gain more interest from institutional investors.

Steadily raising money over the past five years Lowey and Cohen have seen subtle changes in what investors are prioritizing in their due diligence. "While absolute performance remains a key focus, investors are increasingly looking at manager returns over longer periods of time; combining both 2008 and 2009 YTD numbers for example."

Investors evaluating the downside risk of a fund have expanded their analysis beyond performance to also include liquidity. "From our perspective, it would appear that in 2009, minimizing downside risk is nearly as important as determining ......................

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