Unlike a fund-of-funds, there is one fee layer and one balance sheet. Capital can be moved from a strategy with poor opportunity to one with better opportunity within days, and risk is netted across the whole book rather than duplicated.
Central risk management is the defining feature. Teams run to tight loss limits, and a desk that breaches them is cut back or closed regardless of its longer-term thesis. That discipline produces smoother aggregate returns and also high staff turnover.
The structure's fragility is common leverage. Because the strategies share one financing arrangement, a shock in one book can force deleveraging across all of them, which is the mechanism by which nominally uncorrelated strategies become correlated in stress. See pod-shop.
Related: pod-shop, fund-of-funds, hedge-fund, prime-broker, factor-crowding, market-neutral