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| Introduction | |
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| The Fund of Funds Industry | |
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| Fund of Funds in the Hedge Fund Industry | |
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| Hedge Fund Investment Options | |
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| Direct Investment | |
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| Customized Portfolio | |
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| Index Fund | |
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| Fund of Funds Investment | |
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| Growth of Funds of Funds | |
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| Hedge Fund Industry Characteristics and Trends | |
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| Hedge Fund Investment Structure | |
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| Legal Structure | |
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| Numbers of Investors and Minimum Investment Size | |
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| Reporting and Disclosure | |
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| Liquidity | |
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| Lockup | |
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| Summary | |
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| Hedge Fund Investment Strategies | |
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| Convertible Arbitrage | |
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| Distressed Securities | |
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| Emerging Markets | |
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| Equity Hedge | |
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| Equity Market Neutral | |
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| Event Driven | |
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| Fixed Income | |
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| Macro | |
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| Market Timing | |
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| Merger Arbitrage | |
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| Relative Value Arbitrage | |
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| Sector Long/Short | |
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| Short Selling/Short Bias | |
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| Summary | |
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| Fund of Funds Mechanics and the Two-Tiered Structure | |
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| Structural Considerations | |
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| Organization Structure | |
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| Company Structure | |
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| Domicile | |
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| Subscriptions and Registration Exemptions | |
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| Minimum Investment Size | |
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| Fees | |
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| Lockup, Redemption, and Liquidity | |
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| The Fund of Funds Management Company | |
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| Manager Due Diligence and Selection | |
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| Risk Management | |
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| Operations | |
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| Performance and Exposure Reporting | |
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| Summary | |
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| Advantages and Disadvantages of Funds of Funds Advantages | |
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| Diversification | |
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| Due Diligence | |
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| Risk Management | |
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| Portfolio Management: Strategy Selection and Manager Selection | |
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| Access to Funds/Capacity | |
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| Consolidated Reporting | |
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| Fees | |
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| Performance | |
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| Disadvantages | |
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| Exposure to Other Investors' Cash Flows | |
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| Fees | |
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| Lack of Control/Customization | |
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| Decreased Transparency | |
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| Summary | |
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| Historical Performance of Funds of Funds | |
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| Performance of Funds of Funds Fund of Funds Substrategies | |
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| HFRI Fund of Funds Conservative Index | |
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| HFRI Fund of Funds Strategic Index | |
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| HFRI Fund of Funds Diversified Index | |
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| HFRI Fund of Funds Market Defensive Index | |
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| Fund of Funds Returns 1990-2002 | |
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| Fund of Funds Returns 1990-2002 | |
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| Fund of Funds Volatility 1990-2002 | |
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| Fund of Funds Volatility 1990-2002 | |
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| Fund of Funds Return Versus Volatility 1990-2002 | |
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| Fund of Funds Risk-Adjusted Returns--The Sharpe Ratio | |
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| Sharpe Ratio 1990-2002 | |
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| Sharpe Ratio 2000-2002 | |
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| Preservation of Capital 1990-2002 | |
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| Fund of Funds Performance Versus Equities | |
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| Fund of Funds Performance During Bear and Bull Markets | |
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| Average Performance During Negative Periods and Positive Periods 1990-2002 | |
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| Return Distribution 1990-2002 | |
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| Fund of Funds Performance During Periods of Market Stress | |
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| Summary | |
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| Fund of Funds in a Portfolio With Traditional Assets | |
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| Linear Analysis of Returns | |
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| Adding Funds of Funds to a Traditional Portfolio | |
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| Achieving Superior Risk-Adjusted Returns | |
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| Summary | |
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| A Commonsense Approach to Selecting Funds of Funds | |
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| Defining Objectives and Identifying Candidates Step 1: Define Objectives and Parameters | |
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| Objectives | |
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| Parameters | |
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| Strategy Restrictions | |
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| Structural Requirements | |
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| Fund of Funds Objectives and Parameters Worksheet | |
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| Step 2: Screen to Create a Funds of Funds Short List | |
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| HFRI Fund of Funds Conservative Index | |
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| HFRI Fund of Funds Strategic Index | |
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| HFRI Fund of Funds Diversified Index | |
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| HFRI Fund of Funds Market Defensive Index | |
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| Summary | |
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| Issues in Due Diligence: The Fund of Funds Firm Background Information | |
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| Staff Information | |
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| Company Structure | |
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| Asset Management Activities | |
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| Product Information | |
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| Performance | |
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| Summary | |
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| Issues in Due Diligence: Portfolio Management Asset Allocation/Style Selection | |
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| Due Diligence Criteria in Manager Selection | |
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| Portfolio Construction | |
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| Summary | |
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| Issues in Due Diligence: Risk Management Transparency and Separately Managed Accounts | |
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| Transparency | |
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| Managed Account Structures | |
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| Pricing Risk Case Study: Lipper | |
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| Style Drift Case Study: Integral | |
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| Risk Management | |
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| Compliance and Legal Issues | |
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| Summary | |
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| Fund of Funds Selection Case Study | |
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| Scenario | |
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| Defining Investment Objectives and Parameters | |
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| Screening to Create the Funds of Funds Short Lis.t | |
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| Conducting a Due Diligence Screen of the Funds of Funds Short List | |
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| Evaluating Finalists for Selection | |
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| Final Selections | |
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| Summary | |
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| AIMA Due Diligence Questionnaire | |
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| Excerpts from HFR Fund of Funds Industry Report | |
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| Index | |