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As the DC pension plan, the retail and the HNW investor travel towards the Emerald City of absolute returns, who will Toto discover behind the curtain?
By Niki Natarajan
"We're off to see the Wizard
The Wonderful Wizard for FoHFs
We hear he is a Whiz of a Wiz
If ever a Wiz there was
If ever, oh ever, a Wiz there was
The Wizard for FoHFs is one because
Because, because, because, because, because
Because of the wonderful things he does
We're off to see the wizard
The Wonderful Wizard for FoHFs"
With apologies to 'Yip' Harburg for the desecration of his lyrics and L. Frank Baum for the liberties taken with his novel The Wonderful Wizard of Oz, but it seemed an appropriate analogy as retail investors in the US skip merrily down the regulated road to buy funds of hedge funds.
FoHFs might be considered mud by the Winkie Guards trying to control the assets of the largely closed defined benefit market, but for eight mutual fund FoHFs to raise $3 billion in less than a year in an entirely new market - one that had $13 trillion in assets...