Man Reigns As King Of Fund Of Hedge Funds

Man Investments, with an 11% rise to $39.8 billion in multi-manager hedge funds, has toppled UBS to become the top fund of hedge funds, according to the 2006 survey by sister publication Alpha magazine.

Man Investments, with an 11% rise to $39.8 billion in multi-manager hedge funds, has toppled UBS to become the top fund of hedge funds, according to the 2006 survey by sister publication Alpha magazine. UBS fell from the top spot, says Alpha, largely after selling Global Asset Management, its $18 billion fund of funds business, to Julius Baer Group, which jumps on the list from out of nowhere to the No. 8 spot. Rounding out the top five, behind Man and UBS, which still boasts $37.8 billion AUM, are Geneva-based Union Bancaire Privee ($30 billion AUM, up 44%), New York-based Permal Asset Management ($26 billion, up 38%) and HSBC Private Bank/HSBC Republic Investments ($25.2 billion, up 25%). Overall, the top 50 FoHF had a total of $550 billion AUM as of June 30, a 21% jump from a year ago. Funds of hedge funds, almost left for dead not too long ago, can thank their revival to blowups such as that at Amaranth Advisors. “What happened has been an advertisement for funds of funds,” Ed Robertiello of Credit Suisse told Alpha, noting that most FoHFs had no more than a 5% investment in the failed firm and “while it hurts, it’s not an absolute catastrophe.” Alpha reports that many firms in its top 50 are moving toward a solutions-based approach to designing funds of hedge funds. Says Martin Kaplan, CEO of No. 18 Mesirow Advanced Strategies, “When I got started in the business, there was sort of a one-size-fits-all mind-set. Today we want to make sure we’re adding as much value as we can.” Assets under management reportedly have topped $100 billion a year in 2004 and 2005, and despite some performance problems in the industry, investors are not revolting against what they pay for the privilege of putting money in FoHFs. “The fees have held remarkably steady,” Kaplan said in the Alpha interview, though he noted that as institutional investors increase their allocations to the sector, “there will be at least continual pressure to justify your fee.”