Key Takeaways
- • Fundana, a Geneva-based hedge fund of funds established in 1993, has maintained a 27-year track record while continuing to attract investor inflows—a distinction in an industry facing persistent redemption pressures.
- • The firm delivered 12% net returns in 2019, outperforming both the MSCI and HFRX Global Hedge Fund Index, and demonstrated resilience in 2018 by beating both the MSCI and S&P 500 during a down year.
- • Fundana's operational discipline during the 2008 financial crisis—avoiding gates, suspension of redemptions, and Madoff exposure—has positioned it as a trusted manager selector among institutional investors prioritizing downside control.
- • The firm's investment philosophy centers on early talent discovery, downside management, and upside capture, emphasizing that superior manager selection is critical to alternative investment success and can materially differentiate fund of funds performance.
Summary
Fundana represents a rare case study in hedge fund of funds longevity and performance consistency. Founded in Geneva in 1993 as one of the first independent Swiss institutions dedicated entirely to alternative investments, the firm has built a 27-year operational track record while navigating multiple market cycles and maintaining positive investor flows—a notable achievement in an industry where fund of funds have faced structural headwinds and significant capital redemptions over the past decade.
The firm's 2019 performance highlights its competitive positioning. With a net return of 12%, Fundana's fund of funds outperformed major benchmarks including the MSCI and the HFRX Global Hedge Fund Index. This performance extended into 2018, when the strategy generated returns exceeding both the MSCI and S&P 500 despite challenging market conditions—a testament to downside preservation and tactical positioning during equity market volatility.
Fundana's institutional reputation rests significantly on its operational excellence and manager selection acumen. During the 2008 financial crisis, when many fund of funds imposed gates and suspended redemptions, Fundana's advised vehicles avoided both mechanisms and had zero Madoff exposure—a critical differentiator that preserved investor confidence during an industry-wide credibility crisis. This operational discipline has become a core part of the firm's value proposition to sophisticated investors.
The firm's investment framework—"Discover Talent Early, Control Downside, Ensure Upside"—prioritizes active manager selection as the primary driver of excess returns. According to Cedric Kohler, Head of Advisory at Fundana, superior manager selection is fundamental to alternative investment outcomes and requires distinguishing genuine manager skill from statistical luck. Fundana's ability to sustain inflows while most fund of funds strategies experience redemptions underscores investor recognition of this capability, positioning manager selection as a material competitive advantage in the hedge fund industry.
The firm's 2019 performance highlights its competitive positioning. With a net return of 12%, Fundana's fund of funds outperformed major benchmarks including the MSCI and the HFRX Global Hedge Fund Index. This performance extended into 2018, when the strategy generated returns exceeding both the MSCI and S&P 500 despite challenging market conditions—a testament to downside preservation and tactical positioning during equity market volatility.
Fundana's institutional reputation rests significantly on its operational excellence and manager selection acumen. During the 2008 financial crisis, when many fund of funds imposed gates and suspended redemptions, Fundana's advised vehicles avoided both mechanisms and had zero Madoff exposure—a critical differentiator that preserved investor confidence during an industry-wide credibility crisis. This operational discipline has become a core part of the firm's value proposition to sophisticated investors.
The firm's investment framework—"Discover Talent Early, Control Downside, Ensure Upside"—prioritizes active manager selection as the primary driver of excess returns. According to Cedric Kohler, Head of Advisory at Fundana, superior manager selection is fundamental to alternative investment outcomes and requires distinguishing genuine manager skill from statistical luck. Fundana's ability to sustain inflows while most fund of funds strategies experience redemptions underscores investor recognition of this capability, positioning manager selection as a material competitive advantage in the hedge fund industry.
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