UBS Raises Money for Funds

Investors are coming back to funds of funds—at least, to those run by some large banks and asset managers. Thus UBS appears to be successful in getting subscriptions for its multi-strategy vehicles.

One UBS fund is said to have raised about $60 million within a month of its launch this year.

A subsidiary, UBS Alternative and Quantitative Investments, is responsible for picking the underlying funds. Among the portfolio managers is Bruce Almicke, who used to be senior managing director of Blackstone Group and chief investment officer for Blackstone’s funds of funds, possibly the largest such operation. In 2010, he moved to UBS. But he was also at UBS before he went to Blackstone.

Feeder funds lost their attraction in 2008-2009 because of disappointing performance,  the Bernard Madoff fraud scandal and illiquidity due to underlying hedge funds freezing redemptions. Smaller managers continue to struggle or have gone out of business. Investors favor big names like Blackstone and UBS. 

Estimates of the fund of funds share of industry capital range from 50% to much less.

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