A global survey of 50 institutions by research house Preqin has found significant shifts away from investing through fund of funds at the same time as their overall appetite for the hedge fund sector is increasing. 64% of the respondents made their first hedge fund investment though a fund of fund, but only 36% of those continue to do so.

The GFC and 2008 were obviously a turning points for the industry as the survey showed that 80% of respondents that have moved away from fund of funds did so in 2008 or after, presumably as a result of liquidity, performance or transparency.

Other key findings included:

• 64% of respondents entered the asset class through fund of funds investments, but only 36% of these continue to invest solely through funds of hedge funds.
• 36% of respondents that currently invest solely in funds of hedge funds plan to move towards direct hedge funds in the future.
• 60% of respondents cited the extra layer of fees as the main reason they moved away from funds of hedge funds.
• Greater control over their investments (54%) and more in-house resources (13%) were other reasons cited for the move into direct investment.
• Public pension funds still invest heavily in funds of funds, with two thirds of public pension funds only investing through funds of hedge funds.
• Endowments and insurance companies are the largest investors in direct funds, with 66% and 50% respectively only investing in hedge funds directly.

ATTACHED FILESPreqin fund of fund survey (pdf format)

There will be no doubt be more to come from the Trio Capital saga and the liquidator's public examination of Shawn Richard, but how do you tell when he's telling the truth?

A: Probably never.

No doubt an enterprising journalist will one day write a book about the real story behind Shawn Richard, the Astarra Strategic Fund and Trio Capital, but whether it will be found in the fiction or non fiction section of the library is anyone's guess.

Uncovering the truth will take some doing simply because Richard's version of events, his past, his motives and his actions seem to depend on who's asking, and how he feels on the day. Although quick to claim privilege on day one of the liquidator's questioning, Richard has yet to use the "I can't recall" response, but it is only early days yet.

For a history of the debacle, try the Sydney Morning Herald's website here

HFA Holdings has announced it will re-brand and re-position their Australian subsidiary, HFA Asset Management to “Certitude Global Investments” from August 1.

The announcement said that Certitude will increasingly offer single manager products to Australian investors, expand their target market to the institutional end of the spectrum, and provide greater simplicity and transparency in line with current investor requirements.

The company also announced that it was in the final stages of negotiating an exclusive distribution agreement with a leading European based asset manager, expected to be launched in early August.

HFA suffered, as did many fund of funds during the GFC, from redemptions and liquidity in underlying investments, and has seen FUM fall from over $10bn to the current level of A$5.7bn.

Regal Funds Management, the Sydney-based alternative equity and hedge fund manager with approximately $350 million under management has sold a 30% stake in the business to Ascalon for an undisclosed sum.

Ascalon, which is part of BT Financial Group is a specialist investor in boutique fund management firms, providing a range of services to their underlying managers, in particular marketing to Australian investors.

Regal, which was formally 100% owned by brothers Philip and Andrew King, manages a series of wholesale equity-based funds including market neutral, long/short and Asian quantitative strategies and has a six-year track record. Regal's Amazon and Tasman market neutral funds, launched in June '05 and May '07 respectively have both produced annualised returns in excess of 20% since their inception.