Hello folks, Are there any good sources to learn about fund of hedge funds? I want to learn how one construct a good portfolio of hedge funds (so he/she is constructing a portfolio with the underlying assets being hedge funds with their historical returns). I am a newbie in this area, and want to learn as much as possible.
Basically, the hedge fund sales persons will take you to a nice restaurant like Le Granouille or Jean George’s, and you give them some capital because one of them is a hot woman. There’s really no other explanation of why some of these funds get any money.
Capital Allocators podcast j
Please do us all a favor and do not go into this dying industry.
The hedge fund space has been institutionalized to the point where very few managers can produce consistent alpha net of their absurd fees.
Add in a layer of HFoF fees on top of this and you have a recipe for permanent subpar performance for any investors dumb enough to do it.
Is it that bad tho? It cost money to run in-house teams too and large FoFs with scale can usually get significant fee concession.
FOFs are created by managers who want to make tons of money but don’t have that last remaining 1% to open a fund of their own…So they created FOFs by copying what financial advisors do - invest clients’ money into several mutual funds - except in this case it is hedge funds.
But the managers at FOF make big fat fees from the investors and kick backs from hedge funds all at the expense of investors, who are just senior level people managing large pensions, endowments, or funds themselves…bottom line it ain’t their money so they don’t care lol…All connected all bros all big fat brotherhood taking care of each other…Hence, when a fund collapses, it is not uncommon for the same guy to open up another fund in a year or two later.
^lol a very accurate statement.