There is a lack of consensus among hedge funds-of-funds managers on the best direct hedge fund holdings, according to the latest Hedge Fund Monitor from Callan Investments Institute.
Among the 118 funds of funds asked by Callan for its quarterly hedge fund newsletter to provide their 10 largest hedge fund holdings, there were 480 unique hedge fund manager names.
The highest number of top-10 lists in which a hedge fund manager appeared was 18 out of those 118 funds of funds, according to the Callan survey, with three managers reaching that number. Only 16 managers appear in those top holdings 10 or more times.
Also, on average, each top-10 list contained the names of four or five managers that no other funds of fund places in their top-10 lists.
“That's quite a lack of consensus on where these experienced investors prefer to concentrate their manager bets,” according to the newsletter authored by James C. McKee, senior vice president and director of Callan's hedge fund research group.
“Either these professionals are missing unknown opportunities or they have differing views of a 'best idea,'” according to the newsletter.
Also in the newsletter, Callan reported the highest median return in its funds-of-funds database for the year ended Dec. 31was long/short equity at 14.29%, followed by diversified at 10.65% and absolute return at 8.38%.