Hedge Fund Portfolios: Anthony Scaramucci

July 23, 2012 Debbie Jacobs Quote of the Day

Anthony Scaramucci of SkyBridge Capital recently penned a response to Simon Lack’s recent onslaught of books and blog campaigns regarding the ‘stupid’ concept of diversified hedge fund portfolios.

Scaramucci, an investor in hedge fund portfolios, claims that Lack’s perspective is severely mistaken.

“To claim that investing in a diversified basket of hedge funds is no better than investing in passively managed combination of indexed equities and Treasury bills is not only irresponsible, but is cherry picking at its worst,” he wrote.

“Savvy hedge fund investors,” he continued, “will not allocate to a fund without thorough due diligence or understanding the nature and methodology of how the returns will be created. Active portfolio allocators will know when to shift from managers and strategies that are lagging or topping off those with more upside. Over a full investment cycle, a hedge fund portfolio will include exposure to many strategies, including long/short equity, distressed credit, mortgages, global macro, etc.

“People and organizations invest in hedge funds for a number of reasons. These include downside protection against equity bear markets and reducing overall portfolio risk, the opportunity to invest in strategies that offer better risk/return profiles but cannot be replicated by mutual funds or ETFs, as well as adding a non-correlated return enhancer for their overall portfolio. This is especially true for pension funds looking to fill funding gaps in their future liabilities.”

Anthony Scaramucci, Business Insider, Hedge Fund Portfolios, Investment, Simon Lack,

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