Institutional Investor's Alpha Magazine - November 2008 - (Page 55)

Research Center Fund of Funds 50 FUNDOFFUNDS T What Stampede? hat giant sucking sound of investors yanking money from hedge funds isn’t half as loud in the parallel universe of funds of hedge funds. Institutional investors, which typically prefer to access hedge funds through multimanager vehicles, have risen to the occasion, manning the fund-of-funds barricades in an industry that at the end of June approached a record $900 billion in assets under management. “We read in the industry press lots of general, blanket statements that funds of funds are facing redemption pressure, but we are not seeing a signiﬁcant level of redemptions,” says James McKee, a senior vice president and director of hedge fund research at San Francisco–based investment consulting ﬁrm Callan Associates. Though a not-insigniﬁcant number of wealthy households and estates have pulled money from funds of funds, most pensions and foundations appear to be standing behind this year’s Alpha Fund of Funds 50, our seventh annual ranking of the world’s biggest multi manager hedge fund ﬁrms. The list features many of the usual suspects; some of the biggest and best known say the radical drawdown of hedge fund assets this year has largely been avoided by most funds of funds. “We budgeted at the beginning of the year for 10 percent in redemptions of fee-paying money,” says J. Tomilson Bolstered by institutional-investor patience, funds of hedge funds may not be hit as hard by redemptions as many are predicting. By Karl Cates Alpha ’s Fund of Hedge Funds Top 5 Rank Firm Total capital ($ millions) 1 2 3 4 5 Union Bancaire Privée UBS Alt. and Quantitative Investments Man Investments HSBC Alt. Investments Permal Asset Mgmt $56,871 56,740 55,100 46,596 39,181 Hill, president and CEO of New York–based Blackstone Alternative Asset Management. “We have come in well under that.” Blackstone, No. 8 in this year’s ranking, with $31.5 billion in assets under management at the beginning of July, had $30 billion at the end of September. Executives at No. 1–ranked, Geneva-based Union Bancaire Privée, which had almost $57 billion in assets under NOVEMBER 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 55

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - November 2008

Institutional Investor's Alpha Magazine - November 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Risk Rewarded The Good Guys: In the Here and Now Interview: Minister of Finance Cover Story: The Agony of Dan Zwirn Strategies: The Early Birds Are Awake Strategies: The Call of Shari’a Profile: Sweet Home Chicago Research Center: What Stampede? Alpha Bytes: Centralize the Data Unhedged: Commentary: Learning from the Wreckage

Institutional Investor's Alpha Magazine - November 2008

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