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From Kirsten Bischoff, Opalesque New York: While the fund of hedge funds industry continues the struggle to regain its footing, large asset managers remain positive about their hedge fund investments and the need institutional investors will continue to have for fund of funds vehicles.

"There are continuing opportunities in hedge fund investing," said Eric Weinstein, Managing Director and Chief Investment Officer for New York firm Neuberger Berman's fund of hedge funds team, during a conference with reporters last week. The firm, which has $15bn of its $180bn assets under management invested in alternatives, saw its fund of hedge funds product the NB Diversified Arbitrage Fund II return +20.60% during the past year (against benchmark HFRX Global Hedge Fund Index's +14.45%), and +4.49% annualized over the past five years (against HFRX GHFI +0.89%).

Weinstein attributed the capital protection offered by hedge funds through the financial crisis to being the driver behind the interest of institutional investors looking to grow their exposure to hedge funds.

Although May 2010 hedge fund performance was abysmal, it also served as a reminder of the capital protection that these managers provide. Across the board hedge fund managers avoided the larger losses of their benchmarks. Some of the capital protection may be attributed to strategy, however it ......................

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