Notable among long-term large investors in hedge funds are insurance companies, though one does not often hear about them. Financial crises in the past four years led to greater demand for strategies that can do well in bad markets. Hence some big insurance companies decided to create and offer to their customers hedge fund products with such potential.
New York Life is said to have a new fund of funds in the works. The goal is to find managers who’ve made strong returns over multiple market cycles, in particular those with a proven ability to do well at times when stocks and bonds are going down.
New York Life retained Private Advisors to make investment decisions and monitor the portfolio. Private Advisors was founded in 1997 by Louis Moelchert, a former investment officer of the University of Richmond endowment. The firm managed $3.5 billion in hedge fund and private equity assets as of this October.
Charles Johnson III is a partner— he was president of the US arm of EIM, Arpad Busson’s fund of funds business, before joining Mr. Moelchert in 2001.
Private Advisors wants managers with a minimum three-year track record and, like most institutional investors these days, requires portfolio funds to have an independent administrator and annual audits by a recognized accounting firm.
Tags: Charles Johnson III, Louis Moelchert, Private Advisors
HedgeFundSmarts 
January 4, 2012 at 6:32 pm
[…] investors are paying more attention than ever to managers’ past experience in tough markets. What do investors want? Crisis-scarred survivors who showed themselves capable of turning volatility to account. […]