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Riskdata Tracks Funds of Funds' Growth

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NEW YORK (–Institutional investors are indeed a force of change in the funds of hedge funds business, according to Riskdata.

The firm sells risk management software and analysis services to hedge funds and funds of hedge funds.

Riskdata officials said that assets under mangement among its clients grew by more than 60% over the last 12 months, and the firm estimates that about 85% of that growth came from inflows of institutional investor money, with the remainder coming from high-net-worth investors and performance gains.

Riskdata declined to name an exact number of firms that are clients.

One surprise that Riskdata found was that smaller funds of hedge funds are growing at a faster pace than their large-scale counterparts. A greater gain was distributed across all firms no matter the size when officials measured gains on both an equal-weighted basis and on an asset-weighted basis.

Olivier Le Marois, chief executive of Riskdata, said that the firm didn’t want to imply that funds of funds’ overall growth is attributable to their suse of the company’s specific software, but he did say that the additional transparency offered through Riskdata may aid in attracting investors.

“This demonstrates that the flow of institutional money into alternatives has no reason to slow down, as long as we address their demand for risk transparency,” said Mr. Le Marois in a statement.

Funds of hedge funds using the Riskdata’s FOFiX for Funds of Funds include: Liberty Ermitage, London; Prisma Capital Partners, Morristown, N.J.; BNP Paribas Fauchier Partners, London; Europanel Research and Alternative Asset Management, Paris; AGF Alternative Asset Management, Paris; and New Finance Capital Partners, London.

Contact Bob Keane with questions or comments at: [email protected].