| Topic Name: |
Fund of funds?? |
| Message Name: |
Fund of fund |
| Date Posted: |
03/20/2002 |
| In Reply To: |
A neighbor of mine runs what she calls a "Hedge Fund Consultancy Shop," but I have also heard it referred to as a "Fund of funds." I also know she has spoken at numerous conferences on alternative invesment strategies, etc. She recently told my Dad that she can offer me a position as a due dilligence analyst (I am currently an unsatisfied consultant), but she would not give him a strict outline of what that would entail. I believe it is an excellent opportunity, but I am not sure.
Can anyone offer some insight into what they might do exactly, and what that position might entail? Also what are the long-term opportunities such a position would offer. I want to appear at least like I know what the hell it's all about when we get together for an informal interview. |
| Message: |
Heels, the "hedge fund consultancy" sounds like a alternative investment shop that invests in hedge funds. Here's how it works: Frist, the fund-of-fund shop collects assets (money from large investors, pension funds, institutional investors and even wealthy individual investors). Second, the fund-of-fund shop structures investment portfolios that invest in several hedge funds, as opposed to individual stocks. For instance, you are an investor and give your cash to a fund-of-fund firm and tell them you want to an aggressive high return product. They will then say "we have this Aggressive Long/Short product that would be perfect for you". Your money then gets thrown into a portfolio that literaly parcels out your cash to all of the hedge funds that have been picked to be in this "Aggressive Long/Short" fund. Make sense? As a due diligence analyst, you'll probably be working to help assess the quality of the hedge funds that are being considered for inclusion into a fund-of-fund product. The difference from being an equity analyst is that you'll be researching hedge fund performance, not individual stock performance. Thus, your metrics will be things like tracking error (standard deviation of a fund's performance relative to a benchmark) and alpha. Go to www.morningstar.com to get a feel for how the mutual fund industry is broken down - style boxes, etc. Hope this helps.
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