Surveys suggest that certain conspicuous ongoing trends will continue. For example, the classic 20 + 2 fee structure will continue to crumble, replaced by "customized" structures. A full 91% of the small hedge fund managers who filled out a survey agreed with this. A mere 76% of large hedge fund managers did likewise.
Alternative Mutual Funds
Andrew Beer looks at what happens when talented hedge fund managers try and perform within the constraints of the mutual fund structure.
The hedge fund universe has become a much more complicated place since 2008. The old-school hedge funds offering only quarterly redemptions with at least one month notice are no longer the only option for those seeking alternatives plays. And those who are seeking such plays may be somewhat confused by the proliferation of possibilities.
Guest columnist Andrew Smith, CAIA, traces the rise and growth of liquid alternatives.
Guest columnists Andrew Beer and Michael Weinberg look at the opportunities that lie in the largely untapped alternative mutual fund markets.
Why convert a hedge fund to a mutual fund instead of establishing a stand-alone vehicle available to retail investors that could invest alongside the existing hedge fund?
Deloitte's pie graphs emphasize the degree to which both hedge funds and PE vehicles have become dependent upon institutions in general, and detached from the retail market. But Deloitte says that 2014 "will likely see additional efforts by alternative fund managers to engage the retail investor base by taking their alternative investment strategies mainstream."
Despite the uncertainties generated by contemporary politics, Cerulli is convinced that "investing in alternatives such as property and infrastructure funds should remain a major theme in the Thai mutual fund space in 2014."
Cerulli acknowledges that buying an existing boutique, as a way in which an established long-only mutual fund manager might start offering alternative products, is quicker than is the build-from-within approach. But the M-and-A shortcut ought to come with a warning.
Citi Prime's report has in mind specifically the situation of hedge fund firms that are interested in expanding into the public-offerings space. They have to keep in mind that they'll have a completely different investing audience from that of the QIPs and institutions to which they are accustomed.
According to a new 7th Circuit decision, there is a sharp distinction between insider trading in corporate shares on the one hand, and the redemption of fund shares on the other, at least with regard to the traditional theory of such trades.
Private fund managers who want to be part of this wave, who hope to compete for the retail investment market with their absolute-return and non-correlation toolkit, shouldn’t think it is going to be easy. One of the sections of the SEI report is headed “understanding the hurdles.”
John Siciliano, managing director at PricewaterhouseCoopers, updated me on the state of retailization/convergence from the point of view of the mutual fund firm managements with whom he has conferred of late.
Bandon Capital's managing directors believe it is possible to generate alpha from unique non-market sources, and that they do so through their forecasts of domestic and overseas sovereign interest rates.
A new study from SEI shows If an alternative strategy can be offered in a mutual fund structure it has a much broader market opportunity than if not. Hedge fund managers want the mutual fund market just as mutual fund managers want to use the broader hedge fund range of strategies.
This is the first of a new series called "Alpha Hunters." The nimble qualities of alternative investments is part of what makes them essential to every investor's portfolio. They can move quickly to take advantage of market inefficiencies and go where other more traditional investment vehicles cannot. It is in the spirit of seeking the ever-moving alpha that we introduce this series, reaching out to experts in different strategies to see where they are finding alpha. We hope you find this series illuminating and please feel free to send suggestions for Alpha Hunters you'd like to read about. Kristin Fox Managing Editor
Ten years ago, the prevailing thought was that pigs would fly before alternative investments became a mainstream staple for investment advisers. According to the latest research from Cerulli, it’s time for air traffic controllers to wake up because they’re going to have to integrate Dreamliner-sized porkers into flight patterns and guide them into safe landings […]