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In an effort to deliver world-class educational offerings, IMCA provides fresh, compelling, relevant content for the investment consulting and wealth management industry. These offerings are updated monthly and focus on four key topic areas: institutional consulting, wealth management, investment trends, and best practices. Return each month to explore the newest contributions.
The State of Hedge Fund Replication
Published in Investments & Wealth Monitor, July/August 2008
More than 7,500 hedge funds and 2,300 funds of hedge funds managed just under $2 trillion in assets as of the end of the first quarter of 2008 according to Hedge Fund Research Inc. (2008). Any way you look at it, the hedge fund industry is big—so big that many investors now question whether hedge funds deliver on their promise of superior risk-adjusted returns. Combined with illiquidity, lack of transparency, and time commitments, concerns over hedge fund performance have helped spawn a new industry built around hedge fund replication. Replication proponents argue that such strategies are low-cost, liquid, transparent, and often outperform broad hedge fund benchmarks. Read the article.
