| Investment value of MOM parent Fund | MOM&FOF Research Institute |
| Release Time:2020-03-09 13:04:25| Browse Number： |
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When it comes to parent funds, many people have heard of FOHF (Fund of Hedge Funds), the parent hedge fund, but not MOM, the manager's manager fund, Manager of Managers). The biggest difference between the two investment vehicles is that the former is a fund that invests in other hedge funds, while the latter is a parent fund that allows multiple fund managers to manage their money. MOM parent fund can solve most of the shortcomings of ETF and active funds.1. Help investors select suitable sub-funds. Professional knowledge and experience are needed in the process of screening excellent fund managers. Excellent fund managers often exist in private equity funds, and there is no public information, especially fund managers with excellent performance tend to keep a low profile. If you do not usually have in-depth research on the subdivision of the field, it is not easy to find their cooperation. In addition, it is also challenging to get high relative price-to-price terms from good fund managers. Nowadays, famous and excellent fund managers such as Seth Karaman and Ray Dario are in the minority. It is also very difficult to find the fund manager of the rising star. And most good fund managers keep a low profile and rarely take the initiative to turn to investors for financing. Their performance is the most effective advertising. Good MOM parent fund managers not only focus on the returns of potential sub-funds, but also collect other information about sub-funds, such as whether fund employees invest in stocks privately or whether employees often leave. At the same time, the parent fund manager can also explore whether the return of the sub-fund is long-term stable or temporary luck from the investment style, so as to dig out the really excellent but low-key fund managers. 2..Risk control. Another advantage of the MOM model is risk control. Although the fund manager of the sub-fund controls the risk when investing actively, the MOM parent fund can also bring two-tier protection to investors in terms of operation. Two hedge funds, Kyle Buss and John Paulson, were famous for shorting the US market during the 2008 financial crisis, but their performance has fallen considerably since then, underperforming the S & P 500 for several years. In this case, the high transparency of the MOM architecture is very beneficial. Unlike FOF investment, it is a mixed fund (the investment money provided by the parent fund is mixed with the third-party investment money. The investment money of the), MOM parent fund is placed in a separate account. This means that the MOM parent fund can see the operation of the sub-fund every day. Transparency also means that the parent fund's management of the sub-fund has also become very flexible. The parent fund can change the allocation of investment funds to each sub-fund and transfer the investment money from the underperforming sub-funds to the ones with good performance. In addition, the parent fund can use this method to spread systemic risk, achieve diversified allocation, and reduce the obstacles to purchase and redemption. 3. Lower the threshold for investors and increase opportunities to participate in top funds. |
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