Tony Gibson, manager of Coronation's Global Equity Alternative Strategy fund, does not much like the marketing business. "It's hard to pretend a fund is different when it's not," says the South African. "I'm not a good marketer."

Mr Gibson's fund of funds has a long-short bias and invests mostly in hedge funds that seek to profit from both rises and falls in share prices. The portfolio, which was launched in 1996, is focused on only 20 funds.

Top funds include Adelphi Europe, Copper Arch, Hunter Global Offshore, North South Legacy International, Eureka Interactive, Cantillon World, Ivory Long Term, Indus Japan and Boyer Allan Japan.

Most of the portfolio's $443m in assets is in the hands of managers who favour a multi-strategy approach; that is they use various strategies simultaneously.

According to Mr Gibson, the cardinal rule for fund of fund managers is: "It's important to have a pretty clear idea of how the money is being made and lost."

Mr Gibson avoids investing in funds with managers who take strong positions based on macro views of sectors. A drawback of investing in hedge funds is the significant number of managers who are seasoned traders, rather than investors, he says.

"We try to invest in funds that are run by people who actually invest and are run by managers who come from the buy-side, rather than the sell-side."

A favourite fund is Indus Japan, which has "done particularly well" in the past two years. "They've made good returns on the longside of their portfolio."

"When the market drawdown happened in Japan last May, they quickly adjusted the mix of equities in their portfolio," Mr Gibson says.

While Mr Gibson favours investing in managers who are based in the region where their business is conducted, Japan is an exception. The three managers of the Japanese funds in which the portfolio invests are based in New York or London.

"I think regional managers tend to have a better grasp on the underlying drivers of stocks. Global managers tend to be top-down and driven by quantitative statistics," says Mr Gibson.

In his opinion, it is nearly impossible to cover the whole world as a long-short manager.

The US is the fund's largest investment from the standpoint of geography. The make-up of the MSCI world index does have some influence on the mix of funds represented in the portfolio. But Mr Gibson says that if he were to decide to increase the fund's weighting in US hedge funds it would only happen if he were excited about a new manager.

The most influential US manager in the portfolio is Ivory, a Los Angeles-based boutique. Mr Gibson likes the group because some of its analysts worked previously in private equity.

The portfolio's second-biggest holding is in European funds - which makeup about 29 per cent - and its third-biggest is in Japanese funds, which account for 22 per cent of total holdings.