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From Sagar Chakraverty, Opalesque Asia:
See Part One of the article here.
Hedge fund replication strategies seek to produce beta and they offer an alternative way for growth portfolios to capture the diversification and return benefits of hedge fund investing without many of the drawbacks such as large minimum subscription requirements, poor liquidity, high exit barriers, poor risk management, low transparency and so on.
The Alternative Beta Strategies programs builds a portfolio providing attractive long-term returns with low volatility that allows investors to replace high cost products with cost-efficient alternative investment solutions.
In the second part of the Opalesque video interview , the CEO of Alternative Beta Strategies at Zurich-based Partners Group, Dr. Lars Jaeger spoke to the founder of Opalesque, Matthias Knab about the fee advantage, the 500 bps difference, which is key for alternative beta providers. He also discussed how to model alternative beta, and the future of the replication strategy.
"We pay 2 and 20 to underlying managers, 1 and 10 to FoFs, so that combines to somewhere between 5% and 7% depending on how much performance you actually get. So we are saving roughly 500 bps (5%) in fees. There is absolutely no performance fee. Th...................... To view our full article Click here
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