Benchmark Plus, a USD1.6bn fund of funds has launched a long/short equity tracking fund with an unusual "fee reserve" and clawback structure that has a 99 per cent correlation with the HFRI Equity Long/Short Index.

The Benchmark Plus HFRI Equity HedgeTrax fund is a response to two developments in the market: 1) the demand on the part of pension funds and other institutions for exposure to a broad swath of equity long/short strategies; and 2) the need for FoFs to change their value proposition in the marketplace, where institutions and others having been pulling assets from this market since the financial crisis.

Currently, the only product that tracks the HFRI Equity Long/Short Index is the HFRX fund, which has historically had a poor correlation to the underlying index, mainly because of its fee structure.