It was not an easy year for funds of funds, whose underlying managers faced their own performance difficulties in 2015. This was reflected in the performance figures of many funds of funds, with the HFRI Fund of Funds Composite Index posting a 0.23 percent decline last year. But beyond the indexes and industry outflows, the underlying numbers reveal that manager dispersion was high in 2015, making manager selection more important than it had been in previous years. The funds-of-funds firms that got it right were able to grow their assets substantially.

Among those firms: New York-based Blackstone Alternative Asset Management, which appears for the fifth consecutive time atop the annual Institutional Investor's Alpha Fund of Funds 50 ranking of the world's largest hedge fund firms. Stamford, Connecticut-based UBS Hedge Fund Solutions and New York-based Goldman Sachs Asset Management managed to hang on to their previous rankings of No. 2 and No. 3, with $33.9 billion and $28.9 billion in assets under management, respectively. The world's largest 50 fund-of-funds firms collectively managed nearly $578 billion at the end of 2015, representing just over 70 percent of the sector, according to the ranking. That's up less than 1 percent from the previous year's total of $574 billion.