Pictet has been around since before the Battle of Waterloo in 1815, although its alternatives investment experience has developed somewhat since then. The Swiss private banking and asset management firm is now running $4 billion in specific fund of hedge fund (FoHF) products out of Geneva and a couple of billion more in funds of private equity funds.

Its main FoHF products are its $1.5 billion Pleiad and $700 million Mosaic funds, which are global in orientation, although its $476 million long/short fund of funds World Equity Hedge does allocate around 15-30% to Asian managers. On average, the funds were down 15% in 2008 and are up 10-16% this year.

Pictet Alternative Investments' chief executive Nicolas Campiche was in Hong Kong last week to meet some hedge funds and Asian investors. He brings with him the message that after redemptions of 15% in Pictet funds in 2008, he is now seeing money start to flow back towards FoHFs and they have had $180 million of net inflows, mainly from European investors. That is an experience they share with other FoHF managers who are seeing the light at the end of the tunnel.

The entire Pictet alternatives team works in Geneva. Their Asian portfolio manager is Christine Ravioli, who comes to Asia three times a year and initially spent an entire year in Hong Kong to learn about the dynamics of Asian markets and finance. Pictet feels the benefits of having its alternatives department in one location outweighs having on-the-ground, but geographically remote teams. In any event, they haven't been the victim of any major hedge fund blow-ups.

"We had no Madoff exposure," says Campiche. "That wasn't luck -- we rejected Madoff on a number of occasions, though we had been asked by clients and approached by the marketer of the feeder funds. We recognised the conflict of interest between being both a manager and custodian of assets."

He thinks the investment world has now worked itself through counterparty risk issues and operational worries, and the next step in the cycle is for FoHFs to start chasing potential high-performance managers.