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Komfie Manalo, Opalesque Asia: Investment consultants recommend hedge funds to clients, although they
add that "getting them into client portfolios is generally a challenge,"
said Aongus O'Gorman, Senior Investment Consultant Aongus O'Gorman at Willis Towers
Watson in Sydney.
"There is a spectrum of approaches in hedge funds, incorporating
skill-based strategies and alternative beta," O'Gorman said at the
latest Opalesque Australia Roundtable. "Our clients are
generally quite open to considering capturing underlying alternative
betas that can be delivered at fees of 50 to 100 basis points. This fits
with the market down here, which is very fee focused. Whilst perhaps not
as diversifying as the unconstrained skill you should capture from a
quality hedge fund, the lower costs are attractive."
He added that in reality there would be no such thing as an "average"
hedge fund, but if there was one, it would basically have a reasonably
significant exposure to equities alongside an exposure to cash. But such
a fund is not going to deliver much in this low return environment, also
because the fee level will be too high.
Therefore, from an absolute return perspective, with cash rates close to
zero, the expected reward for this complexity is often not sufficient
relative to the fees that are being...................... To view our full article Click here
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