The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Hedge funds: Funds of funds will survive Madoff

Those that avoided Madoff madness surely offer a wiser approach to investment than some investors’ rash direct investments. Neil Wilson reports.

In association with Hedge Fund Intelligence

Hedge funds have faced a lot of criticism over the past year – as many have struggled to cope with the global financial crisis and faced heavy redemptions. A clear majority have delivered negative returns. As I have argued here before, though, not all of this criticism has been deserved. Hedge funds should not be blamed for the onset of the credit crunch; a significant minority have continued to deliver positive returns; and the industry as a whole has still outperformed other risk assets such as equities and real estate/property. But we all know it has been a very difficult time and that conditions continue to be very challenging.

The part of the industry that has had arguably the most opprobrium heaped upon it during this tumultuous period has been the fund of funds sector. While the mean returns from the single-manager universe were deeply disappointing at about minus 15% last year, the InvestHedge Composite showed that the median return for funds of funds – after their extra layer of fees – was of course even worse at minus 16.63%.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree