Funds of hedge funds are an awful business; just ask Anthony Scaramucci after a few martinis at the Hunt and Fish Club (and also after this goddamned interminable SkyBridge deal finally closes). They are also awful clients—the two being related, since as their own clients realize how awful they are, they redeem, and this forces the funds of funds to then redeem in turn from the likes of, say, Citadel. And Ken Griffin? Yea, he doesn’t need awful clients any more than he needs goldbricking wives, not with returns like this and having Wall Street’s best minds on a string when they’re not on the payroll. So those funds of funds? Yea, they can go find their double-digit returns elsewhere. Oh, they can’t? Not Ken Griffin’s problem.
Some of the investors, particularly funds-of-funds, will receive all their money back from the Citadel Kensington Global Strategies Fund by the end of the year, the people said, asking not to be identified because the information is private. Others will get back a portion of their investment, one of the people said….
As investors, funds-of-funds are generally viewed as less sticky -- or long term -- than institutions such as pension funds and endowments.