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Hedge Funds of Funds: A Guide for Investors by Chris Jones

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12

A Sample Hedge Fund of Funds Investment Report

12.1 OVERVIEW

In this chapter I illustrate the points raised in the rest of this section through an example of an investment report on a hedge fund of funds. I have based the report on no particular hedge fund of funds although obviously, as Chief Investment Officer of Key Asset Management, some of the example comes from experience. Nonetheless, this is something of an amalgamation of hedge fund of funds I know and shouldn't be taken to be a factual representation of any one hedge fund of funds. All names of individuals and companies are imaginary where appropriate. As with the example in Part II, I add comments on answers in italics when I think it may be useful.

12.2 THE REPORT

Investment report on the K-Hedge Fund of Funds

12.2.1 Summary and Critical Analysis

Fund: K-Hedge
Manager: K Asset Management
Manager Contact: Jack F
Strategy: Multi-Strategy Fund of Funds
Geographical Focus: Global
Fund Inception: 1990
Manager Founded: 1989

Fund Overview

K-Hedge is a multi-strategy hedge fund of funds seeking to return 3 month LIBOR + 3–5% p.a. over a three year rolling period with risk of around 5% annualised volatility. The fund invests across all hedge fund strategies but there is an in-house bias away from CTAs, Structured Credit and ABL and mortgage backed securities arbitrage. The fund has been around for 16 + years without a losing year and has generally delivered on its return objectives.

In the case of companies ...

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