U.S. dealers have started adding fund of hedge funds to multi-asset class best-of baskets, in a step on from referencing against just single stocks. John Neubauer, v.p. in structured alternative investments with JPMorgan in New York, said these best-of structures will commonly include an equity, fixed-income, commodities and hedge fund component, and work like the best-of equity deals where each year the best performer is selected and then dropped from the basket. He explained the investor receives participation in the average performance of the best performing asset class, and the lower-performing classes don't affect the payout.
Structurers Add Hedge Funds To Best-Of Baskets
