Is a fund of funds based on two hedge funds more likely to get a 40% return, or a fund of funds based on twenty-five hedge funds? Why?
I would guess 2 funds
A 40% return is quite unlikely with most funds, so with 25 funds in the FoF the average would be pulled down even if a handful did achieve the 40%
If however your 2 funds both have a good year you could do it
Yeah, that's what I was thinking too. The variance of the returns is also a lot higher from a small amount of funds which is also why I was thinking that. With 25 funds, you'd expect an FoF to pull near the average, provided the manager actually diversified the assets and didn't invest into funds in the same sector. You'll also be safer with 25 for the same reasons as above, of course.
The jet appears to be an F100 Super Sabre (1950s) which did rely on a parachute to create drag for landing, but they normally looked like this
Perhaps it is an early concept drawing?