Résumé en anglais

Given the increasing importance of funds of hedge funds in the development of the hedge fund industry and the cost-intensive nature of multi-manager structures, investors are questioning whether FoHF add value to an extent that justifies the extra layer of fees induced by their activity. To answer these questions from a European perspective, Edhec Risk and Asset Management Research Centre carried out a survey of the practices of European hedge fund multi-managers. This survey focused on examining the following three dimensions that are commonly perceived as the main sources of added value by multi-managers, namely fund selection, asset allocation and portfolio construction, and reporting and investor information. The authors report the results of this survey and shed some light on the causes of the gap between practitioner and academic perceptions with regard to the approach followed by hedge fund multi-managers. They conclude that the institutionalization of hedge funds, and the move from absolute performance to diversification benefits, cannot simply be understood as a change in scale and client objectives, but more as a profound modification of investor requirements impacting several dimensions of the industry.