NEW YORK -- Funds of funds are grabbing a bigger chunk of hedge fund manager assets, according to a survey of hedge fund managers conducted by Hennessee Hedge Fund Advisory, New York.
"It's very significant that the fund-of-funds industry is growing," said E. Lee Hennessee, managing principal.
The average hedge fund manager in the survey of 665 firms received 19% of its capital from funds of funds, up from 12% in a year-earlier survey.
The results show institutional investors -- big users of funds of funds -- are willing to pay an extra layer of fees to access hedge fund performance, according to Ms. Hennessee.
Typically, fund-of-funds fees are about 100 basis points a year, although they can range widely, she said.
Also, the amount of pension fund money that's invested directly in hedge funds was up slightly, she added.