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Komfie Manalo, Opalesque Asia: Singapore-based Asian hedge funds specialist GFIA said funds of funds are dead as allocators are either insourcing those skills, or buying consulting or separate account management services. In its Research Insight release for May, GFIA further said that at the retail level, liquid alternatives are taking over. And at the institutional level, while the skills of manager assessment, due diligence, and portfolio construction are still invaluable, they absolutely are not being bought in commingled vehicles charging one and 10.
"Allocators are insourcing these skills, or buying consulting or separate account management services," GFIA founder Peter Douglas said. He added, "I’m pessimistic about hedge funds, although that pessimism is partly definitional. We have always considered that the key strength of a hedge fund is the ability to deploy the minimum infrastructure needed to deliver excellent idiosyncratic investment skills, to intelligent capital owners, in order to optimize the balance of risk and return. That means principal-owned businesses, small pools of capital, and maverick investors in non-standardized organizations."
However, Douglas said the capital flows the markets see now are demanding a much more homogenized investment approach, are comfortable with risks and return parameters that sit well inside the efficient frontier, and need redundancy at every level of the organogra...................... To view our full article Click here
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