The concept of running a portfolio of strategy-focused fund of funds of hedge funds (“3F”) hasn’t been talked about much lately, to the extent that newcomers to the industry may not even know this approach. Yet, as the team from Harcourt has been demonstrating for over 15 years, this approach has consistently outperformed multi-strategy fund of hedge funds.
In fact, over a 3 year period, 75% (81% over 5 years) of Harcourt’s selected funds of hedge funds rank in the first quartile, with the remainder in the 2nd quartile (no funds in 3rd or 4th quartile). While for example over the past nine years the Eurekahedge Global Multi-Strategy FoF Benchmark Index is up just 2%, Harcourt’s Alternative Leaders Fund is up 29%. Of that performance, 23% points come from their fund selection attribution, and 4% from Harcourt’s strategy allocation attribution: a clear proof of Alpha.
The Harcourt Alternative Leaders Fund is domiciled onshore in a Luxembourg fund and offers transparent oversight and high quality reporting standards. The fund is managed pari passu with Harcourt’s $1.6bn custom mandate for a large Swiss pension fund. The fund, which offers investors access to stable returns, low volatility, modest correlation to traditional assets and limited drawdowns, charges only 0.25% management fees and 10% performance fees (with high water mark) on outperformance to benchmark. These fees are more than compensated by reductions and preferential access negotiated with the underlying hedge fund managers.
In this Opalesque.TV BACKSTAGE video, hear portfolio manager Ilario Scasascia talk about:
- The data that shows how focused funds of hedge funds deliver more than multi-strategy funds
- The four competitive advantages of strategy-focused funds of hedge funds compared to multi-strategy fund of hedge funds
- How Harcourt achieves 4% points net outperformance from strategy allocation and 23% from fund selection
- How negotiated preferential access and reduced fees from managers more than compensate Harcourt’s own fees
- Harcourt’s universe of eligible hedge funds of funds
- Fund Selection criteria and process: How to select the winners of tomorrow
- Liquidity Terms & Liquidity Monitoring, Fees
Ilario Scasascia is an Executive Director at Vontobel Asset Management AG and the portfolio manager of the Harcourt Alternative Leaders Fund. Before that he was a hedge fund analyst at Quadriga Wealth Management and Consultant at BearingPoint. Harcourt is the Alternative Investment brand of Vontobel Asset Management. The Harcourt Alternative Leaders Fund is based on a successful managed account, which was
launched in November 2000, and is only available to institutional investors. The fund leverages the expertise and investment capabilities of Harcourt’s Hedge-Fund Solutions & Advisory team, which has more than 17 years of experience building and managing customised hedge fund portfolios for institutional clients.
Vontobel is a globally oriented Swiss private bank headquartered in Zurich. It was established in 1936 and has around 1,500 employees worldwide. Vontobel specializes in wealth and asset management for private clients and institutional investors, as well as investment banking. As of 31 December 2015, Vontobel held around CHF 187 billion of client assets.
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The concept of running a portfolio of strategy-focused fund of funds of hedge funds (“3F”) hasn’t been talked about much lately, to the extent that newcomers to the industry may not even know this approach. Yet, as the team from Harcourt has been demonstrating for over 15 years, this approach has consistently outperformed multi-strategy fund of hedge funds.
In fact, over a 3 year period, 75% (81% over 5 years) of Harcourt’s selected funds of hedge funds rank in the first quartile, with the remainder in the 2nd quartile (no funds in 3rd ...more
