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Benedicte Gravrand, Opalesque Geneva:
When seeing that assets and liquidity advertised in hedge funds were never a good match and that "the issue reared its ugly head in the financial crisis of 2008," Richard Travia and Michael Beattie, Partners at fund of funds house Tradex, had the idea of creating a program designed to counter those liquidity issues.
"We stripped out the most liquid funds that would give us monthly transparency so that we could stress the underlying securities they owned to ourselves, and we came up with a program which we named The Liquid 50," Beattie explained in an interview with Opalesque. "In the funds that we did due diligence on, there were probably about 50 that fit the criteria. It certainly does not mean that we would run 50 funds at any one point in time, but that was the selection that we had."
And so was created the crisis-inspired fund of hedge funds Tradex Global Liquid 50. The partners see Liquid 50 as a new investments style for a fund of funds model and think "the old model is broken."
The fund of hedge funds (FoHF), a monthly liquid diversified portfolio of around 30-50 managers, is up around up 2.7% YTD (to end-April), having cumulated around 6.6% since its November 2009 inception (with no down year). Comparatively, the HFRI Fund of Funds Composite Index is up 3.11% YTD. Fees are 1.5% for management and 15% for performance.
The underlying funds use liquid instruments in liqu...................... To view our full article Click here
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