@article {Stemme60, author = {Ken Stemme and Peter Slattery}, title = {Hedge Fund Investments}, volume = {2002}, number = {1}, pages = {60--68}, year = {2002}, publisher = {Institutional Investor Journals Umbrella}, abstract = {This article covers two main topics revolving around the decision to build a hedge fund investment program. The first question an allocator must answer is if a successful hedge fund program can be built with internal resources. This takes into consideration such factors as size of the allocation, budget available for this part of the portfolio, existing resources and expertise, and the time involved in performing first-hand analysis. It is demonstrated that the cost of a consultant or a fund of funds does not differ dramatically from the internal costs once time is factored into the equation. The second portion of the article discusses some questions to consider in choosing a professional allocator such as a consultant or fund of funds. Among these issues are past performance (and how to evaluate it), the role of luck, personnel turnover, motivation, size of team, size of assets, business risk, capacity, the role of asset allocation, hiring and firing discipline, risk management and transparency. The article concludes by stating that there are no right answers to the question of how a program should be managed but for the allocator to be certain that his hedge fund program is aligned with his portfolio{\textquoteright}s philosophy and goals.}, URL = {https://guides.pm-research.com/content/2002/1/60}, eprint = {https://guides.pm-research.com/content/2002/1/60.full.pdf}, journal = {Special Issues} }