Replication

P&I Article: What every allocator needs to know about hedge fund replication

From guest contributor Andrew Beer: In the current heated debate on hedge funds, there’s no middle ground. You’re either pro or con, in or out, red or blue. But this is, frankly, stupid. Hedge fund proponents make legitimate points about diversification, but fail to acknowledge where they’ve been flat-out wrong on many issues (e.g. wishful thinking that alpha would adequately cover fees). Likewise, the “out” camp is correct that fees are egregious, but offer no credible alternative. Redeem from hedge funds and invest in … bonds with negative yields? Equities at the tail end of the second-longest bull market in …

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