WEST PALM BEACH, FL (HEDGECO.NET) – One of the developments from the meltdown of the technology sector four years ago is the overhaul of asset allocation strategies among pension and endowmentmanagers. With the entry of CalPERS into hedge fund investments, many other pension funds in the industry have followed their move. This change in tactics has enabled pension and endowment funds tohave access to not just stocks and bonds, but also a larger array of investment strategies such as the ones used by hedge funds.
A new report shows that multi-strategy hedge funds are most suitable to pension and endowment needs. Multi-strategy funds will limit the expensive fees to be paid to individual hedge funds. These fees generally range from 2% for management to 20% for performance. Multi-strategy hedge funds offer increased transparency, and are generally easier to manage. They also offer more liquidity than independent hedge funds or fund of funds.
Multi-strategy hedge funds offer other advantages to large pension or endowment managers. These funds may hire in-house managers and experts, to closely monitor such portfolios, making it easier for investment decisions to me made and implemented on a daily basis. Neal Berger a principal at the Apogee Capital Partners LP said, “If a fund manager happens to be involved in a strategy that has fallen out of favor or has otherwise lost its edge, returns can become quite depressed and the manager’s business might even become jeopardized.” He added, “Running a multi-strategy fund allows us to attack this issue head-on and follow the ‘bait fish’ around the globe into whatever groups of strategies provide the most attractive edges and inefficiencies.�
According to published reports, Berger�s multi-strategy fund, Apogee Fund has earned 12% year-to-date in 2004.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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