Im trying to understand the business model of a particular hedge fund, Advance Alliance Investment Suite. They call themself an manager of investment managers, and it seems like they hire external managers from what i can read on their website. However, i dont quite understand how such a model would work. Is this actually a Funds of Funds? Simply a fund that invests in other hedgefunds based on on some allocation optimization model?

They sound similar to Russell Investments in the US. For the latter, you could get a copy of their Adv Part II form to learn more about theirbusiness. I have no idea if there is a similar form in Australia.

I don't know Advance Alliance Investment Suite, but that won't stop me from pontificating...Marketing to and asset gathering from retail investors can usefully be separated from the investment management function per se. It seems to me that Advance specializes in the former while delegating the latter. And this is not uncommon. There are a lot of institutional money managers that would gladly accept money in multi-million USD amounts but have no expertise or interest in dealing with individual retail customers.Advance apparently started out as part of a bank, so they probably marketed themselves to the banks' customers, and perhaps to outside customers as well based on the banks reputation. Now they are independent, but the same model may still work. They may advertise, build brand recognition, even come up with new ideas for funds ("we need something that addresses the current fascination with commodities" LOL), deal with customers and then find institutional money managers that will run the fund(s). In some ways it could be similar to the "mutual fund group" idea in the US [but one with no inhouse funds, all outsourced]. The analogy Alan made with Russell Investments in the US is also interesting.

Looks like its part of the BT Financial Group

Sounds like a nice way to pay two sets of fees for your investment.