Taking a Close Look at the European Fund of Hedge Funds Industry- Comparing and Contrasting Industry Best Practices and Academic Recommendations

Over the last few years institutional investors’ traditional portfolios have failed to meet their objectives in terms of risk and performance.

Author(s):

Noel Amenc

Professor of Finance, EDHEC Graduate School of BusinessDirector, EDHEC Risk and Asset Management Research Centre

Jean Rene Giraud

CEO, Edhec Risk Advisory

Lionel Martellini

Professor of Finance, EDHEC Graduate School of BusinessScientific Director, EDHEC Risk and Asset Management Research Centre

Mathieu Vaissie

Research Engineer, EDHEC Risk and Asset Management Research CentrePhD Candidate, University of Paris Dauphine

Investors have thus shown growing interest in new forms of diversification, especially in investment vehicles that offer better protection during extreme market conditions. This has naturally led them to consider hedge funds as part of their investment universe. The massive arrival of institutional investors in an “industry” that up until then had been reserved to some High Net Worth Individuals or Endowments/Foundations resulted in a dramatic capital inflow and entailed a profound diversification of investors’ risk profile.

Type: Working paper
Date: le 01/10/2004
Research Cluster : Finance

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