Reviews - What do customers think about Hedge Funds of Funds: Composition And Risk Management?
High-school level introduction to Funds of Funds Aug 8, 2006
This is a strange book. It provides a valuable outline to the proper steps in fund-of-fund management, but the detail in implementing each step is either comically bad, or so vague as to be worthless. For example, at one point Grauberg discusses watching the movement of a fund manager's eyes when you speak with him, to tell if he's lying. I paid $225 for this nonsense? His discussion of distribution identification is extremely irregular. Sometimes he provides critical values, sometimes he doesn't. He never provides the information for computing critical values yourself, perhaps because he presumes the reader won't understand how to implement it.
The factor analysis section amounts to four pages containing nothing even conceivably useful. The portfolio optimization chapter says only "run your portfolio optimization software," with more detailed operating instructions on a couple of packages the author favors. There is no discussion of the underlying mathematics or algorithms.
The text has errors ("find" instead of "fund", for example), that suggest this book was edited by a spell-checker rather than a human reader. What little math the book contains tends to be superficial, and sometimes misleading. (For example, he discusses the conversion of time scales from monthly standard deviation or monthly VaR to annual by multiplying by the square root of 12. However, this is wrong in the case of autocorrelated returns, as many hedge funds have.)
Nobody of financial or statistical sophistication should waste time with this book. The target audience is probably a college graduate or MBA with no particular math skills, about to take a first job in finance with a Fund of Funds.
Excellent book, expensive but worth the money May 9, 2005
This is a rare book that one can read many times - always finding some new details and ideas. Dr. Grauberg has condensed the entire Fund-of-Funds investment process in a brief and accessible form and done it exceptionally well. Whilst the most important point for the end-investor is to understand the hidden pitfalls of investing into hedge funds, most currently available books provide just a generalized description of this so highly misunderstood industry. But Andrew Grauberg's book is absolutely different. It cuts almost all the corners of hedge fund portfolio construction ranging from the psychological aspects of due diligence to institutional risk management and optimal asset allocation. Reading this book you feel the real hands-on experience of one of the best hedge fund experts.
I have found very useful that Andrew gives a critical insight to the common concepts of hedge fund valuation explaining why it is absolutely wrong to use the mean-variance methods for hedge funds. I think everyone now understands that it is impossible to use the standard deviation as a risk measure for derivatives. How can we use it for the hedge fund valuation when their distributions are even more complex? This great book not only clearly explains the problems of the classic risk management system but gives a deep insight into the new institutional type solutions like the VaR.
In brief, Andrew Grauberg's book is a well-written, complete and comprehensive guidance how to build a Fund-of-Funds. That's it. Great job, Andrew!
Shallow Superficial Book Apr 26, 2005
Hardly a primer-this book is an absolute waste of time. All it covers is a multitude of topics with a half page text description. Author even gets to, disadvantages of Sharpe Ratio what is now common knowledge to say the very least. This book is a complete waste of time. Very disappointing.
The best Funds of Hedge funds book Sep 10, 2004
I have been waiting for this book for over six months. Excellent work, simply the best "funds of funds" book available. It gives you everything you need to build a top-performing hedge fund of funds: risk management, portfolio optimization, stress testing and so on. It is written in easy language and does not require a deep knowledge of the underlying maths. What surprises me is that Dr Grauberg has compressed so much information that would be enough to write not one but several books.
The book incorporates numerous new ideas that have never been published, like portfolio genetic optimization and trend segmentation. Highly recommended for every hedge fund investor and practitioner.
Simon Elimelakh, CFA, Head of Quantitative Analysis, BT Financial Group, Sydney