By combining the three important elements of a fund of hedge funds: due diligence, portfolio construction and ongoing monitoring, and adding to the mix a good service provider, funds of hedge funds can truly add value
A lot of criticism has been levelled at funds of hedge funds concerning their charging structure. Yes, these funds often do charge both a management fee and a performance fee; but it is also worth considering how much work goes into the running of these products and how difficult it would be for a retail investor or even a pension fund trustee to replicate. Initially, it is worth looking at the problems investors face when considering a hedge fund investment. Just as the scale of assets under management in the hedge fund universe continues to grow rapidly, the number of funds operating in...
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