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Do Hedge Funds Have a Role in Trusts?Do Hedge Funds Have a Role in Trusts?

This asset class can add expected returns with limited stock market exposure

22 Min Read
hedge fund

 

Today’s high risk, low interest rate environment presents a dilemma for prudent trustees seeking to meet the needs of both income and remainder beneficiaries. A portfolio dominated by bonds is likely to feel much more comfortable, but deliver little income, as well as meager growth for the remaindermen. On the other hand, adding to equities doesn’t feel appropriate in today’s uncertain environment. 

This makes hedge funds seem appealing to many trustees. Can this asset class really add to the expected returns of a trust with limited stock market exposure? If so, how would it affect the income the portfolio generates? We’ll explore these investment considerations, without addressing contractual, fiduciary or legal considerations.1  

Our re...

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About the Authors

Gregory D. Singer

Senior Vice President, Capital Group Private Client Services

Gregory D. Singer is an asset allocation and wealth planning specialist at Capital Group Private Client Services. Prior to joining Capital Group in 2012, Greg was a senior managing director with AllianceBernstein serving in wealth planning, investment and marketing roles. Previously, he was a director for the Pepsi-Cola Company, where he held positions in finance, strategy and marketing. He has also served as the lead strategist for a subsidiary of The Limited and as an M&A analyst for Lehman Brothers. Singer concurrently earned a BS in finance and a BAS in computer science from the University of Pennsylvania, and he holds an MBA in finance from the Kellogg School of Management at Northwestern University. He has published extensively in industry press and academic journals and has been cited in numerous periodicals, including The Wall Street Journal and The New York Times. He is also a member of the investments editorial board for Trusts & Estates magazine. Greg is based in New York.

Andrew Auchincloss

J.D., Bernstein Global Wealth Management

Andrew S. Auchincloss joined Bernstein Global Wealth Management in 2007; a Director in the Wealth Management Group, he focuses primarily on tax and investment planning strategies for offshore individuals and families.


Previously, Auchincloss was with the multinational law firm White & Case LLP, where for 18 years he represented international and domestic families, charities and financial institutions in the context of tax, estate planning and fiduciary law. Auchincloss has been listed in the peer-rated publication Best Lawyers in America.

He received a BA from Yale College and a JD from the University of Virginia.