Credit Suisse is rolling out a group of products designed to mimic returns of hedge fund strategies, known as “hedge fund clones”, a move following initiatives by a number of investment banks in recent months. The Swiss bank has joined forces with academics operating in the hedge fund replication field: Professors William Fungi and Narayan Naik of the London Business School and David Hsieh of Duke University. Merrill Lynch, Goldman Sachs and Deutsche Bank are among the investment banks seeking to provide hedge fund returns through a generic product. Replication, or cloning, is based on the view that the performance of hedge funds is largely driven by movements in underlying assets, such as share indices rather than the specific skills of hedge fund managers. As a result, advocates of hedge fund clones say it should be possible to mimic hedge fund returns by mechanically recreating the industry's exposure to these underlying assets. Clones should also be cheaper for investors, as hedge funds typically charge a 2 per cent annual management fee and a 20 per cent performance haircut or even more.