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From Kirsten Bischoff, Opalesque New York:

Fund of hedge funds (FoHFs) finally began to gain some traction in the hedge fund industry recovery during the third quarter of 2010. Liquidations slowed to 54 (according to HFR), which was the slowest since FoHFs began experiencing widespread trouble in 1Q2008. In total the global field has slimmed down by approximately 500 funds since the global crisis began.

As FoHFs investors seem ready to reallocate, the Centre of Alternative Investments & Risk Management at Zurich University of Applied Sciences (ZHAW) has been developing a risk rating (Total Risk Rating) to analyze and illustrate the risk management capacities FoHFs.

The FoHFs industry has a significant presence in Switzerland and ZHAW Centre currently tracks all Swiss registered FoHFs through free accessible database for Swiss funds of hedge funds and is approved by the Swiss Financial Market Advisory Authority (FINMA) for electronic publication of investment funds. Peter Meier, former Chief Economist at the Cantonal Bank of Zurich and current Head of the ZHAW Centre says that Switzerland ranks third in the world in terms of FoHFs assets under management.

FoHFs suffered during the crisis because the majority of their investors were retail investors who were not prepared for the 2008 crisis nor for the drawdown in FoHFs performance.

“Due diligence has much more ......................

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