Funds of Hedge Funds

Funds of funds may invest in multiple (usually around 20, but sometimes more than 100) underlying hedge funds with the aim of seeking the best hedge funds available while diversifying across managers and strategies. The result is gaining the benefits of investing in hedge funds with a much more consistent and attractive risk/reward profile and removing the need for highly specialized research and monitoring resources that investing in a wide range of hedge fund requires. The value-added role that a fund of funds manager plays often hinges on the manager’s ability to provide access to the capacity of exceptional hedge fund managers that are sometimes closed to investment, as well as expertise in manager due diligence, strategy selection, portfolio construction and monitoring.

 A Few Fund of Funds Options

• Aurum Resource Fund. A multi-manager, multi-strategy fund dedicated to investments in natural resource markets. The Fund has been designed to capture the anticipated secular uptrend in commodity prices driven both by strong demand from emerging economies such as China and India as well as constraints across the global supply chain. The Fund emphasizes commodity market investments through hedge funds trading and investing in natural resource and commodity instruments. Natural resource commodity markets include energies (oil, natural gas, and refined products), base and precious metals, agricultural and soft commodities. Related markets traded could include power, utilities, alternative energy and water-related securities.  Aurum believes that an extraordinary investment opportunity exists where demand outstrips supply and equilibrium is years away.  Available in  US / Euro / Sterling   Min US$25,000

• New Star Managed Hedge Fund. A low volatility fund made up of a basket of 7 funds (6 long/short and 1 convertible arbitrage). It aims for 10% annual growth with a low volatility of 5.3%. Min US$10,000.

• The 3A Windrider Fund is a Cayman Islands open-ended multi-class fund of hedge funds that uses leverage on a broadly diversified portfolio to generate higher returns. The 3A Windrider Fund is available both in USD and EUR.

• Paradigm Global Enhanced. An onshore US fund of funds, with moderate volatility and attractive returns (around 13% p.a. over 10 years). The New York Police Pension Fund invests in it. Min US/Euro $20,000.

• Regency Hedge Index Tracker.  The MSCI hedge index fund available retail.  It is designed to follow the MSCI hedge index, with an element of leverage so that it can outperform the index it replicates.  Fairly stable through diversification.  Min US$15,000 or Euro or Sterling equivalent.

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