Funds of Funds: Creating Value Differently

I was alerted to an article by Albourne Village about how funds of funds (FoFs) have been changing after the credit crisis of 2008.  One of the unfair criticisms from institutional investors and academics is that hedge funds and private equity managers do not want FoFs as clients.  In October 2010, SEI and Greenwich Associates discovered that 50% of buyside investors only invest in FoFs.  For investors in both hedge funds and FoFs, 60% of assets under management are placed in FoFs.  The institutions in the study were Foundations & Endowments, Public, Corporates and Consultants.  The items that provide FoFs an edge are access to managers, building customized portfolios and access to emerging markets hedge funds.