Hedge Fund of Funds Investing: An Investor's Guide [Hardcover]

Joseph G. Nicholas (Author)

Book Description

Publication Date: January 1, 2004 | ISBN-10: 1576601242 | ISBN-13: 978-1576601242 | Edition: 1

Hedge funds have rightly gained the attention of private and institutional investors in recent years, proving themselves as useful portfolio diversifiers and preservers of wealth while greatly dispelling their reputation as an "unsafe" investment. Yet investors attempting to navigate in the field of hedge funds face significant challenges: the large number of funds, the diversity of strategies used, the range of financial instruments traded, and the various formats for investing.

Pooling multiple hedge funds together into one vehicle, the fund of funds provides a ready solution, combining professional management expertise with asset allocation. In this book--the first of its kind--industry expert Joseph Nicholas shows investors how these funds operate, the benefits and risks, and the criteria and due diligence to utilize when selecting funds. Nicholas provides an in-depth analysis of historical fund performance and offers unique insight into the industry and trends that may affect its evolution.

Clear, insightful, and illustrated with numerous charts and graphs, Hedge Fund of Funds Investing is an essential resource for serious investors.

Editorial Reviews

Review

"Joe Nicholas's timely book does a magnificent job of providing concise, valuable information about these popular new funds." -- Dan Rauchle, President, Wells Fargo Alternative Asset Management

"Offers powerful insights into the fast growing word of fund of funds investing and strategies." -- Lawrence Simon, President and CEO, Ivy Asset Management Corporation

Review

"While hedge fund of funds have proliferated as a relatively new investment vehicle, reliable information about these vehicles has been limited. Joe Nicholas's timely book does a magnificent job of providing concise, valuable information about these popular new funds."
- Dan Rauchle
President, Wells Fargo Alternative Asset Management

"A creative and disciplined work that offers powerful insights into the fast-growing world of fund of funds investing and strategies. A quick and informative read for both the HNW and institutional investor."
- Lawrence Simon
President and CEO, Ivy Asset Management Corporation

"Hedge Fund of Funds Investing provides a thorough, well-articulated discussion of the key characteristics and issues associated with investing in a fund of hedge funds. I believe the frank disclosure of both the advantages and disadvantages of these vehicles, as well as the information on selecting a fund of funds, will make this book required reading for individual and institutional investors alike."
- Frank Belvedere, CFA, FCIA
Vice President of Alternative Investments, Montrusco Bolton, Montreal, Canada

This is a great reference for those who are just beginning to invest in hedge funds, as well as those who already have a hedge fund of funds allocation. If you are new to this investment vehicle, the book provides a thorough description of fund of funds and a great framework for conducting the due diligence process. If you are already invested in fund-of-funds, it will prompt you to ask some probing questions at the next meeting with your fund-of-funds manager."
- Cindy Koury
Senior Managing Director, Victory Capital Management

"Hedge fund expert Joe Nicholas dissects the industry's hottest trend, investing in fund of hedge funds, in his new book. It's a must-read for institutional and private investors alike."
- Joe Hershberger
Managing Director, Putnam Lovell NBF Securities Inc.

"Joe does it again! By taking complex and critical issues in hedge funds, he transforms them into the most accessible and readable form. Read it and reap."                                        - P. Morgan Kash
Senior managing director, Paramount Capital, Inc.
Board Member, Hedge Fund Association

"There has been tremendous growth in the fund of hedge fund business with assets doubling in the last year.  Joe clearly explains the reasons for this growth as he examines the hedge fund industry and assesses fund of hedge funds as the most effective way to gain exposure to the hedge fund arena. The book is a terrific resource for those considering an investment in hedge funds and/or a fund of hedge funds."
- Patricia Young
Managing Director and CIO, NewMarket Capital Partners, LLC

"Joe Nicholas has created an authoritative and innovative handbook of fund of funds investing that is essential for both financial and nonfinancial decision makers.  Building upon his previous writing, he has successfully applied his practical hands-on experience to demystify the hedge fund industry using common sense explanations that do not depend on obscure jargon or understanding."
- Sara Albrecht, CFA
Executive Committee and Trustee,  Museum of Contemporary Art, Chicago

See all Editorial Reviews

Product Details

• Hardcover: 288 pages
• Publisher: Bloomberg Press; 1 edition (January 1, 2004)
• Language: English
• ISBN-10: 1576601242
• ISBN-13: 978-1576601242
• Product Dimensions: 6.4 x 1.1 x 9.3 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.2 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #245,697 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

9 of 9 people found the following review helpful:

5.0 out of 5 stars Highly Recommen, October 13, 2004

By 

Rolf Dobelli "getAbstract" (Switzerland) - See all my reviews
(HALL OF FAME REVIEWER)    (TOP 500 REVIEWER)    (REAL NAME)   

This review is from: Hedge Fund of Funds Investing: An Investor's Guide (Hardcover)

Joseph G. Nicholas' book is not for the faint of heart or the light of wallet. If your idea of a strong investment is a 401K plan and a few blue chip stocks handed down from your dear departed grandmother, this probably isn't the book for you. However, for those interested in how the very rich get very richer, as well as those charged with the weighty responsibility of protecting institutional and private assets, this book could be worth its weight in gold or stock certificates. Nicholas writes at a level that makes his information just comprehensible to those with minimal investment knowledge, while still very useful to insiders who know the menu of every deli within a two-mile radius of Wall Street. His in-depth historical analysis explains the current strong interest in hedge funds of funds investing, and his case studies will teach you the all-important matter of how to select the right fund of fund manager we strongly recommends this book to anyone who wants or needs to learn more about investing at the most elite levels.

17 of 20 people found the following review helpful:

5.0 out of 5 stars Exceptional! Explains this booming investment sector well!, March 26, 2004

By 

William B Graves (San Francisco, CA United States) - See all my reviews

This review is from: Hedge Fund of Funds Investing: An Investor's Guide (Hardcover)

This is an exceptional book that does a great job of explaining the history, charter, rationale, mechanics and investing strategies of Fund of Funds. As hedge funds have exploded in popularity, they have become the investment world's "cocktail conversation" of choice, but most investors do not understand how these funds operate or even how they can be accessed and utilized as an investment option. Funds of Funds (FOFs) allow access to hedge funds - but similarly to hedge funds, these investment vehicles are misunderstood by many and remain shrouded to most investors. Joseph Nicholas's third book, Hedge Fund of Funds Investing, explains these alternative asset management firms in a clear and concise manner. I have read Mr. Nicholas's other books - this is his best work yet with thorough explanations and an easy, concise and powerful writing style.

Nicholas does a great job describing the evolution of FOFs and how they offer strategic, access and diversification advantages over investing in individual Hedge Funds. His descriptions of the FOFs mechanics and their multiple tiered structures illustrate clearly what goes on "under the kimono" of this somewhat secretive area of the alternative investment world. He illuminates how lockups, fees, redemptions and other restraints affect investment and fund selection - all imperatives that many investors may not readily understand.

Most importantly, as Nicholas has superior access to the data obtained through his firm, Hedge Fund Research, he is able to paint a very thorough picture of FOFs return over the years and how manager selection affects those returns. As an investor in hedge funds himself, Mr. Nicholas has developed impressive screening methodologies and describes these in detail in this book, both through direct explanation and case study.

This is a great book for anyone who has even a little uncertainty about the operations and/or the investment selection of FOFs. As a recent Wharton MBA myself, I know that many of these topics are not covered in classical investment training - it's just too recent of a trend. But FOFs are an explosive trend - with nearly 1/3 of all hedge fund investments - and one that all investors need to understand. Mr. Nicholas's book does an outstanding job in providing this background on the fundamentals of FOF investing.

2.0 out of 5 stars Watch out for the "investing" word in the title., August 17, 2011

By 

TMK_1981 - See all my reviews

Amazon Verified Purchase

This review is from: Hedge Fund of Funds Investing: An Investor's Guide (Hardcover)

As I looked backed through the praises from industry specialists on page 1 of the Book, I felt like the guys weren't totally honest about the strong feats of the Book. 200+pg could be reduced to 30 pages once you filter away repetitive ideas and comliance issues. On investing part, all i saw were those tables with returns, volatility and sharpe ratios. There were some efficient frontiers as well.
If you are looking for interesting facts, useful findings on the Funds of funds industry performance, look elsewhere. If you are more or less acquainted with hedge funds and are hungry for refreshing ideas, then skip this book. If you are actually looking for a methodology to screen out a fund of funds manager, you might use it. Even then the author couldn't go further than common sense. Sorry, but this is more of booklet than a book.