1. Tracking crucial provisional changes in funds within their
2. Improving their product to attract new investors.
"Funds of hedge funds need as much information as possible to help them devise successful strategies to reassure and protect current investors as well as court new investors," says Jeffrey Axelrod, CEO of Cogency.
"We chose the topic for this paper based on the large number of inquiries we are getting from our clients regarding how they can best leverage their accounting systems and re-model their portfolios in today's environment."
The paper's first section provides details on how funds of hedge funds can monitor and respond to prevalent methods being employed by fund managers to limit outflows. It provides a detailed guide to these techniques and describes how funds of hedge funds can model these scenarios and turn them into meaningful information in portfolio, investor and accounting reports. Of crucial importance for funds of hedge funds is the ability to accurately track and review these techniques employed by managers in order to develop the strategies necessary to protect their investors.
Secondly, the paper takes a detailed look at how funds of hedge funds can engineer their own funds to provide new investors with an improved opportunity. Techniques designed to avoid exposing new investors to existing holdings - including setting up "side pockets" or setting up a separate liquidating trust - are outlined in full.