Description
Hedge funds have been investing in other hedge funds for many years. Over time, the motivation, structure, size and pace of these arrangements have changed. Today, we are increasingly hearing about the large multi-strategy firms allocating to start-ups and smaller managers as a way to find talent in a competitive environment. Most of the allocations have been to internal portfolio managers but increasingly allocations are being made to external managers as well.
The white paper explores the evolution and current features of these investments. An overview is provided of several mega multi-strategy managers and the investments they have made to smaller and start-up managers. The final section of the paper examines where the trend may be headed.