Hatfield Liptak Advisors represents Ramius Capital, a global alternative investment firm based in
New York, whose fund-of-funds group is already offering this type of relationship to pension funds globally. “They’re looking to partner with a super fund in a clean portfolio of brand new investments [and] they’re going to be mindful of where the opportunities will be this year, which will probably be in credit,” Hatfield says.
The new market environment could also change the way fees are structured in
the hedge fund-of-fund space, with the concept of charging a high fixed fee in
addition to a performance fee potentially phased out. Lakeview and
Saguenay Offshore Fund, the two fund-of-funds within the NWQ
stable, offer products that charge a performance fee only – an indication that
the managers back their own ability to add value. “The quantum still needs to
be reasonable but I think that’s where the model is going – the fixed
management fee for fund-of-funds will come down,” Keary says.