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Komfie Manalo, Opalesque Asia:

As clicheed as it may be, investors should make sure to only invest in strategies that they understand, said Cedrick Kohler, head of advisory at Fundana at the recent Opalesque 2017 Gulf Roundtable.

Kohler said that he often encounters non-investment professionals on investment committees, including doctors or teachers seeking advice on a strategy: "Every time we propose a strategy, we try to start with relatively simple ones that people can really get a real understanding on. This could be equity long/short for example as opposed to statistical arbitrage or relative value fixed income. The latter can be relatively difficult for people to grasp at first."

While making sure investors understand the sources of returns for example is crucial, Kohler emphasized that "monitoring is never enough. Being invested is the ultimate test."

In addition, the appropriate sizing of the hedge fund / alternative investment allocation is paramount. "It's one thing to have someone explain a strategy to you in a meeting room with a powerpoint presentation, it's another to experience actual investments. So, we recommend to start small, even if your goal is to have a much bigger allocation later on, so you can make sure you understand the performance in different market conditions. Our experience i......................

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