Gam fund aims to offer stable absolute returns; Gam has launched multi-arbitrage fund of hedge funds managed by Dorothy Dewitt.(Global Asset Management Associates Inc.)

Investment Adviser, October, 2002

Shaista Ahmed

Funds of hedge funds are becoming increasingly popular as volatility in equity markets continues.

Fund of hedge funds aim to build diversified portfolios, limiting exposure to risk and volatility.

However, despite this limited risk approach, European hedge funds, both long and short selling, have suffered significant losses this year.

Recent research from Eurohedge revealed that as many as one in four hedge funds had suffered losses during the first half of 2002 and in July three-quarters of long and short hedge funds lost money.

Tass/Tremont, the hedge fund information provider, found that as many as 40 per cent had recorded falls in value.

However, they are still seen by many as an alternative to the...

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