Hedge Funds of Funds

 
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Hedge Funds of Funds

   
Gain greater diversification and a wider range of return opportunitiesTo help you control risk through diversification, our fund of funds structure provides access to a range of strategies, managers, markets, instruments and investment techniques
 
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Hedge funds usually target positive absolute returns rather than seeking to outperform a specific benchmark of one sort or another. With low correlation to traditional equity and fixed income investments, hedge funds can add valuable diversification benefits to a portfolio. By grouping a number of skilled hedge fund managers together, with each pursuing one or more of a number of unrelated strategies, a Fund of Hedge Funds amplifies portfolio diversification benefits and provides ongoing monitoring and risk management capabilities.

Getting access to the best hedge fund managers is not always easy, nor is choosing among the literally thousands of managers around the world. Obstacles to hedge fund investing include identifying managers, high minimum investment requirements, lengthy lock-up periods and the risk of catastrophic losses, just to name a few.

Investing in a fund of hedge funds can resolve these problems. The value of the product is largely captured in three ways: portfolio construction, liquidity, and monitoring. Portfolio construction means a fund of funds manager should have the relationships in and knowledge of the industry to identify the right hedge funds, and then combine those funds in a way to meet the portfolio's risk and return objectives. Liquidity is important as a fund of hedge funds is often able to offer entry to its investment vehicle with lower minimums than some individual hedge funds, and may have shorter or no lock-up periods or withdrawal penalties. Monitoring is also an important service that a fund of funds provides. While diversification of the portfolio with a number of hedge funds reduces exposure to big losses at any one fund, ongoing monitoring via phone calls, office visits, and underlying security-level transparency provides a higher degree of investment oversight.

Employing a skilled fund of hedge funds manager who has the right infrastructure, personnel, risk management capabilities and business model can create significant value. As market participants continue to discover this value, funds of hedge funds are growing in profile and assets managed. Fees, track records, and manager experience are all important considerations when choosing a fund of hedge funds.

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Investment products and services are offered through Northern Trust Securities, Inc., member FINRA and SIPC and a wholly owned subsidiary of Northern Trust Corporation. Any attached research reports containing the Northern Trust Logo or trademark were prepared solely by employees of Northern Trust Investments, Inc., an affiliate of Northern Trust Securities, Inc.

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This material is provided for informational purposes only and does not constitute an offer of any of the investment products described herein. Each investor should consult their own advisers regarding the legal, tax, and financial suitability of this type of investment. No person should invest who is not, either alone or with their advisers, able to evaluate the merits and risks of this investment. Access to information about Northern Trust hedge funds of funds and private equity funds of funds is limited to investors who either qualify as accredited investors within the meaning of the Securities Act of 1933, as amended, or those investors who generally are sophisticated in financial matters, such that they are capable of evaluating the merits and risks of prospective investments. Subscriptions may only be made and received on the basis of the Confidential Offering Memorandum which investors are advised to read carefully before investing in this product.
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John D. Sjkervem
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John Skjervem
Executive Vice President
 
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John D. Sjkervem
John Skjervem
Executive Vice President
 
Mr. Skjervem leads the national investment management practice for Northern Trust’s Personal Financial Services (PFS) business from the firm’s Chicago headquarters.  His responsibilities include investment policy development with a particular focus on portfolio construction and implementation.  He also directs the investment management activities of over 200 Northern Trust portfolio managers across the firm’s 85-office PFS franchise.

Mr. Skjervem joined Northern Trust in 1991 as a portfolio manager in the firm’s Santa Barbara, CA office where he managed financial asset portfolios for individuals, pension plans, foundations and non-profit agencies.  In 2002, John was appointed Chief Investment Officer for the Western Region of Northern’s PFS business.  In that role, he supervised 30 portfolio managers across three western states from Northern’s regional headquarters in Los Angeles.

Prior to his tenure at Northern Trust, John worked in Los Angeles as an associate economist for consultants Natelson Levander Whitney, and as a public finance specialist for investment bankers Ehrlich Bober & Co.

John earned a M.B.A. degree with concentrations in Finance and Statistics from the University of Chicago’s Graduate School of Business, and received his B.A. degree in Economics from the University of California at Santa Barbara.  He holds the Chartered Financial Analyst designation, is a director of the CFA Society of Chicago, the nation’s oldest society of financial analysts, and serves as a board member for the St. Francis Foundation in Santa Barbara, CA.