European funds of hedge funds are taking advantage of increasing demand from US pension schemes, which have grown wary of direct investment in hedge funds.
GAM, a fund manager owned by Swiss bank Julius Baer, opened its fund of hedge funds to institutional investors in the US two years ago and secured 20 mandates last year, including in November a $750m (€513m) allocation from the South Carolina Retirement System.
Man Investments, part of UK-listed alternative investment provider Man Group, is increasing staff in its US offices. Swiss fund manager Gottex last month tapped Merrill Lynch for a chief investment officer in the US.
Permal Group, the hedge fund arm of US asset manager Legg Mason, has also been hiring.
Academics have sometimes criticized funds of hedge funds, saying their fees, charged in addition to the fees of underlying hedge fund managers, subtract too much from investment performance.
