It’s no secret that hedge funds have had a rough couple of years. That means trouble for institutional investors — pension funds and the like with billions under management and millions of people to think of.According to consulting firm Agecroft Partners, institutional investors used to depend on fund of funds (hedge fund seeding companies) to guide them to funds that would give them the monster returns they crave. Now, however, because successful funds are fewer, farther between, and harder to find they’re depending on hedge fund consultants instead.
This trend, says Agecroft, it’s having a negative effect on fund of funds.
This trend is the primary reason why industry fund of fund assets have been declining, but it typically only effects the largest fund of funds organisations that were able to raise significant capital from the large pension funds. These large fund of fund organisations will continue to bring in significant business, but not necessarily enough to replace the assets that are being redeemed.
So hedge fund consultant… think about it.