Investors have started to express interest in the techniques of a leading academic who has concluded that hedge fund returns can be replicated by trading futures on traditional assets, avoiding many of the pitfalls of the hedge fund industry.

In a working paper entitled Who needs hedge funds? Harry Kat, professor of risk management and director of the alternative investment research centre at Cass Business School in London, argued that dynamic trading strategies can be devised to replicate funds of funds and individual hedge fund returns.