Customer Reviews

Hedge Fund of Funds Investing: An Investor's Guide

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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.

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.

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.

Investors should read this book if they are looking to invest in a fund of funds. The author has done a great job explaining the strategies and techniques used to manage the fund, and great thorough analysis on how to analyze its performance. The book also includes a lot of useful information about the background of this type of inverstment product and how to evaluate risk, fees, performance, etc.

very presentation, easy to read and understand. Excellent for starters and must have for professionals.