New Funds On The Block
This article appears courtesy of Institutional Investor
Hedge funds of funds are looking beyond fees to win the hearts – and dollars – of pension funds and institutional investors burdened by multi-layer fee structures. New York-based Belstar Group will open its multi-strategy, multi-advisor Belstar Multi-Advisor Hedge Fund (onshore) and Belstar Multi-Advisor 2x Hedge Fund (offshore) to investors Feb. 1. The fund has been trading with partner money since October.
The fund, describes Kenneth Orr, director and chief investment officer and managing partner of Glocap Partners, is a hybrid of a fund of funds structure and a straight hedge fund in its multiple manager approach.
"It's designed to be a very diversified fund that would perform in virtually all market conditions," he says, "and will take advantage of sideways markets."
The fund will charge investors only a single layer of fees – a 2% management fee and a 20% performance fee. Typically multi-manager funds charge an incentive fee when one manager reports positive returns while another is negative, which can result in a negative return overall. Orr says his fee system is based on netting risk, instead.