The following research paper was selected for presentation in the Due Diligence Forum program at PortfolioConstruction Conference 2008.

Category
Subcategory

Alternatively
Hedge Funds

Due Diligence Forum speaker

Kate Wilkie
Product Specialist for Funds & Alternative Solutions
Credit Suisse

Due Diligence Forum summary

The words paradox and contradiction are often used interchangeably and wrongly. But whereas a contradiction asserts its own opposite, many paradoxes do allow resolution of some kind, as long as the observer can question the original premises.

This presentation and underlying research paper examine whether the philosophies of alpha and benefits of passive management can be successfully combined. They show that passive hedge fund investing - indexing - has been an ideal way of getting low cost exposure, especially to some traditionally more efficient markets. Finally, they look at the debate that has evolved around hedge fund indexing (mimicking active hedge fund manager indices) and hedge fund cloning (replicating returns from hedge fund factors), to do away with the second layer of fees charged by Fund of Hedge Funds.