CHAPTER 15
Investing in Hedge Funds
LIKE MOST investment decisions, investing in hedge funds is a rational process that begins with an investment goal and results in making one or more investment selections. The process is designed to improve the chances of achieving a set of investment objectives. It is important to follow a methodology in constructing a portfolio of hedge funds: to create a framework within which to select investments and to evaluate and monitor the portfolio’s risk and performance. Such a framework provides an efficient information feedback loop that allows the adjustment, refinement, and successful management of a multiple fund or manager investment portfolio.
To properly analyze hedge fund strategies, combine them to construct ...