capital protection restricts Funds of hedge funds to more liquid assets, says Absolute CEO
Capital protection structures on funds of hedge funds are restricting the range of underlying investments to more liquid and cautious assets, according to Christopher Aldous, chief executive officer at Absolute Fund Management. Fund of funds managers are often required by banks, which have created the capital guarantee structure, to have a daily value on their underlying investments to track fund performance closely. This, Aldous said, could mean investing more heavily in liquid strategies and being more cautious about investing in funds with other approaches. He added: 'It is easier ...
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