Here’s a question for you: What is the actual purpose of FoF ?
In theory, they are supposed to do the due diligence, the forensic accounting, the deep background checks that ordinary investors cannot.
Then once they identify a group of funds they want to allocate capital too, they are supposed to run the asset allocation (cash bonds stocks).
Beyond that, they should be diversifying across styles, strategies, cao sizes, geographic regions.
Additionally, they are also in charge of maintaining oversight of the funds — watch performance, style drift, etc.
Now ask yourself this: How many FoF actually do all that? How many FoF did that (competantly) for Madoffs.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.