Forward Launches Hedge Fund in Sheep’s Clothing
Jan 14th, 2007 | Filed under: Hedge Fund Industry TrendsBy: FinAlternatives
Published: January 12, 2007
Most mutual fund/hedge fund hybrids have taken the form of “1X0/X0″ strategies with a net market exposure remaining at 100%. But here’s an example of a mutual fund that is pursuing an all-out hedge fund strategy.
According to FinAlternatives, San Francisco-based Forward Management is launching a mutual fund with a long/short credit mandate (by unhappy coincidence, that’s the strategy last week’s Deutsche Bank survey said was going to shrink by 7% in 2007).
Investors Love Performance Fees
Okay. Maybe “love” is too strong a word. But after all the bemoaning of hedge fund fees by the media, Forward firmly believes clients actually don’t mind paying performance fees. According to Forward’s President Alan Reid, performance fees are okay with retail investors as long as they don’t have to deal with those pesky K-1s:
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[…] We have recently posted on a couple of stories regarding a new breed of “hedged” mutual funds that has emerged as US mutual fund regulators relax rules governing short-selling. In this well-timed research paper academics from the London Business School, Georgia State, Northeastern University in Boston crunch some numbers to get a handle on this phenomenon. They use data from Morningstar and Lipper (both of whom seem to be preparing for an arms race in hedge fund reporting). […]