FUNDS of hedge funds, which pool together alternative strategies and managers in a single fund vehicle, appear to have mostly dropped off the radar of high net worth individuals and family offices.
Instead, the bulk of inflows today is from institutional investors, who see the vehicle as a means to achieve alpha, says Isaac Souede, chairman and chief investment strategist for Permal Group, an alternative asset manager. Permal manages some US$23 billion in assets.
Based on data from Citi Investment Services, wealthy individuals and family offices provided some US$500 billion, or 80 per cent of capital, to the hedge fund industry in 2002. Institutions' share was 20 per cent, or US$125 billion.
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