Want to get a good idea of where hedge fund investing is going with family offices then look at what Scott Luttrell is doing.
Luttrell’s Dallas-based family office, LCM Group, has cut hedge fund allocation to just 1% of its portfolio. OK, no big deal, you might say, just another family office jumping on the private equity bandwagon. But Luttrell made a great deal of his money from hedge funds and in 2008 his family office had as much as 35% of its portfolio in the alternative asset class.
Luttrell started his investment career trading financial market futures as a member of the Chicago Board of Trade back in the late 1970s. He launched his first hedge fund in 1988. So, as the saying goes, what Luttrell doesn’t know about hedge funds you can write on the back of a postage stamp.
Surveys have suggested family offices have cut their allocations to hedge funds, but if individuals like Luttrell are to be seen as a lead indicator, the true level might be by much lower than the 8.1% of portfolios recently indicated.