This article provides some insight about liquid vs. traditional hedge funds, and alternatives.

In addition to accessing the right alternative strategies, investors must also focus on accessing the right managers within those strategies. While we believe certain strategies can fit into a mutual fund format, several major questions remain for the investor such as: How good are the managers and will they be successful going forward? What is their edge and how repeatable and sustainable is that edge? How do they successfully implement ideas into a portfolio construct?

Given the large dispersion of returns among managers of hedge funds and other alternative strategies, we believe that manager selection is critical in alternative investing. Because traditional hedge fund vehicles offer managers greater flexibility in portfolio implementation, this arena typically attracts the industry’s highest quality managers.

As a result, this can lead to negative selection bias among hedge

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