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Hedge Funds in Asia

Saturday, June 18, 2016

Obituary: Hedge Fund of Funds Model

"I am not afraid of death; I just don't want to be there when it happens!"

Woody Allen b. 1935
Actor, Playwright, Comedian and Musician

Fast forward to 2016. Didn't we see this coming? Didn't we warn ourselves of the coming commoditization of the the hedge fund industry? Didn't the naysaysers warn that simply repacking a group of underlying managers added so apparent value if performance sagged, correlations shot up across strategies and so-called superior due diligence did not prevent a continued stream of blow-ups? We all knew that these risks existed. Why did we still support to the Hedge Fund of Fund industry? Why did we all run into the light, along a busy road?

Times have changed and the industry with it. Smaller, niche oriented operations may survive. Scale is now no guarantee of success. Operators who are seeders may also find a time and a place. The cruz will be in actions of institutional investors. Lets hope they get it right this time around. Aurora Management RIP.