First global sound practices guide for FOHFs
July 2008

Written by Sophie Baker

The world’s first global guide to sound practices for fund of hedge funds (FOHFs) managers is to be published by the Alternative Investment Management Association (AIMA) in early 2009.

The guide is being developed by fund of funds practitioners, and will focus on areas including risk management, disclosure to investors, valuation, management of conflicts of interest and other operational issues, providing information for investors, regulatory and political communities, and the hedge fund industry’s service providers.

Practitioners within the group manage US$150bn of assets between them worldwide, and include Allianz Alternative Asset Management, Unigestion, and Penjing Asset Management. The group is chaired by Gilles du Fretay, president of HDF Finance.

Andrew Baker, deputy CEO of AIMA and a member of the steering group, commented: “There are currently no dedicated guidelines for fund of hedge funds managers yet the majority of new institutional investors tend to favour this investment route, rather than investing directly in hedge funds.

“With established sound practices in place for hedge fund managers and on various hedge fund-related topics, there is a desire to document managers’ activities and responsibilities. The guidelines will demonstrate both the amount of work achieved in this area to date as well as the industry’s continued focus on documenting and enhancing its practices,” he added.