Title: Hedge Funds Why Fund of Funds Key Issues
1Hedge Funds Why Fund of Funds ?Key Issues
- Frederic Neefs
- Senior Vice President,
- Head of Investments London
2Credit Agricole Alternative Investment Products
Group long term experience the key
- Audited track record since 1992
- Backing of Crédit Agricole Group rated AA
- Significant industry experience
- Experienced management team
- Institutional client focus
- Disciplined investment process
- Established relationships with the leading hedge
funds - 35 dedicated employees 15 investment
professionals - Operations in London, Chicago, Paris and Tokyo
- Assets under management over US 2 billion
3Why Fund of Funds ?Key Issues
Growing importance of fund of funds as
institutional route to hedge fund investing
Source BARRA
4Why Fund of Funds ?Key issues
Hedge Fund strategies are varied and changing.
Source TAS, HFR, EACM
5Why Fund of Funds ?Key issues
Increasing number of managers detailed analysis
is both resource intensive and time consuming
requires global presence
Number of Private Hedge Funds
Source Credit Agricole / Watson Wyatt
survey Data VAN Hedge Fund Advisors
International.
6Why Fund of Funds ?Key issues
- Manager analysis is vital discipline,
relationships, experience essential.
Manager universe 5,000 managers using public
and proprietary databases
Initial screening Quantitative
analysis Qualitative analysis initial manager
interviews
Result List of eligible managers, up to 150 for
each strategy
Manager visits analysis of investment process
strategy business model
Result Short lists, up to 20 for each strategy
Result Over 50 approved investments
Detailed due diligence Investment
recommendations to Investment Committee
7Why Fund of Funds ?Key issues
- Fund of funds can offer investors reduced risk
and better risk adjusted returns.
ELIMINATION
Low performing Funds
Rigorous Investment Process
Portfolio Diversification
Risk Dilution
Fund of Funds the appropriate solution
8Why Fund of Funds ?Key issues
- The advantages to investors of using a Fund of
Funds are - quick access at low cost - compared to developing
extensive internal organisation - portfolios with targeted risk / return profiles
with low correlation - a thorough analysis of strategies
- a rigorous selection process of managers
including creation of focused short lists of
superior managers for each strategy - can overcome capacity issues
- continuous monitoring of investments and the
overall portfolio - active asset allocation
- diversification create portfolios of
alternative strategies that show low correlation
to each other and to major market indices - a single investment and unified fee structure
- simplified reporting and administration
- standardised liquidity
9Disclaimer
- Credit Agricole Alternative Investment Products
Group is a division of Crédit Agricole Asset
Management London Branch, which is regulated by
the Financial Services Authority for the conduct
of investment business in the United Kingdom.
This presentation is for information purposes
only and is not intended as an offer or
solicitation with respect to the purchase or sale
of securities, including shares of the Funds.
Shares of the Funds are offered on the basis of
their prospectus only. Opinions and estimates may
be changed without notice. The Funds are
unregulated collective investment schemes for the
purposes of the UK Financial Services and Markets
Act 2000 (the FS Act). Accordingly, this report
is for distribution solely to persons in the UK
permitted to receive it under section 238 of the
FS Act and regulations made thereunder, and to
persons in other jurisdictions who may receive it
without breaching applicable legal or regulatory
requirements. It may not be copied or
distributed to any other person and must not be
distributed to private customers in the UK. The
past performance of investments is not
necessarily a guide to future returns. Changes
in rates of exchange and other factors may cause
the value of an investment to go up or down.
Additional risk factors are described in each
individual fund prospectus.