September 2015


October 1, 2015 | Permalink
Catalyst Funds added two new strategies to its lineup of alternative mutual fund products. The Catalyst IPOx Allocation Fund will primarily invest in the common stocks of newly-listed U.S. companies and will purchase stocks both at the time of listing and in post-IPO trading in companies across market capitalizations. That fund's portfolio is split between two components, the Core Long Component and the Dynamic Component, each of which will utilize a distinct investment strategy. The second fund, the Catalyst Hedged Commodity Strategy Fund, will typically invest in call and put options on physical commodities futures contracts, and short-term fixed income securities. Investments will be diversified across various commodity sectors including, but not limited to, agriculture, energy and metals. Positions will typically be held for under one year and will include cash and cash equivalents. This fund aims to produce returns uncorrelated with those of global equity or commodity markets.
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September 28, 2015 | Permalink
According to an Alternative Investment Survey from Morningstar and Barron's, the growth rates for alternative funds have slowed but still remain the highest compared to any other Morningstar category. Fund companies continued to launch funds at a record pace last year, many in the multi-alternative, long/short equity and non-traditional-bond categories. The report noted that "the contrast of increasing fund launches against softening flows suggests that currently supply may be outstripping demand." However, investors' enthusiasm for multi-strategy, long/short equity, long/short debt, and managed futures strategies, may mean a future pick-up in asset flows. The survey also found that while institutions expect to ease on their investments in alternatives in the next five years, advisors might step up theirs. Multi-strategy funds were listed as a top current allocation, as well as a top strategy for future allocations, by both advisors and institutions. The next most favored strategy was long/short equity.
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September 24, 2015 | Permalink
Industry attorneys warned that the failure of rules designed to ensure orderly trading in equities on Aug. 24, which led to a halt in trading in 455 stocks and ETFs, may cause the SEC to slow the approval of new ETFs. Currently, firms must receive "exemptive relief" from the SEC for new ETFs, which the agency usually approves within six months. The SEC is reportedly pouring through the trading data from Aug. 24 to get a better idea of what could be done to address the volatility ETFs saw on that day.
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September 24, 2015 | Permalink
As stock market volatility ticks higher, the Liquid Alternative Investments Company has emerged to help financial advisers navigate the alternative investments space for portfolio diversification. The company launched eight months ago and was designed to simplify the use of registered alternative-strategy funds. The platform lets advisers run their own screens and build their own portfolios. It also offers several goal-oriented model portfolios and screens and ranks nearly 450 liquid alternative funds based on a multifactor-analysis system.
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September 24, 2015 | Permalink
Fund Name: Palmer Square Strategic Finance Fund
Adviser: Palmer Square Capital Management LLC
Sub-Adviser(s): None
Fees: Not Specified
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $5 million minimum initial investment; $2,500 minimum subsequent investment
Filing Date: Sept. 21, 2015
Effective Date: Pending
   
Fund Name: Total Income+ Mortgage Fund
Adviser: Bluerock Fund Advisor LLC
Sub-Adviser(s): None
Fees: 1.5% Management Fee
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $1 million minimum initial investment (Class I); $2,500 minimum initial investment for regular accounts; $1,000 minimum initial investment for retirement plan accounts (Class A and C)
Filing Date: Sept. 17, 2015
Effective Date: Pending
   
Fund Name: Ivy Apollo Strategic Income Fund
Adviser: Ivy Investment Management Company
Sub-Adviser(s): Apollo Credit Management LLC
Fees: 0.68% of net assets up to $1 billion; 0.62% of net assets over $1 billion and up to $2 billion; 0.58% of net assets over $2 billion and up to $3 billion; and 0.57% of net assets over $3 billion.
Open- or Closed-End: Open-End (Mutual fund)
Investor Restrictions: $750 minimum initial investment.
Filing Date: July 17, 2015
Effective Date: Oct. 1, 2015
   
Fund Name: Ivy Apollo Multi-Asset Income Fund
Adviser: Ivy Investment Management Company
Sub-Adviser(s): Apollo Credit Management LLC
Fees: 0.70% of net assets up to $1 billion; 0.65% of net assets over $1 billion and up to $2 billion; 0.61% of net assets over $2 billion and up to $3 billion; and 0.58% of net assets over $3 billion.
Open- or Closed-End: Open-End (Mutual fund)
Investor Restrictions: $750 minimum initial investment.
Filing Date: July 17, 2015
Effective Date: Oct. 1, 2015
   
Fund Name: TCW/Carlyle Liquid Tactical Fund
Adviser: TCW Investment Management Company
Sub-Adviser(s): Carlyle Liquid Market Solutions
Fees: Not Specified
Open- or Closed-End: Open-End (Mutual fund)
Investor Restrictions: None
Filing Date: July 16, 2015
Effective Date: Sept. 29, 2015
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September 24, 2015 | Permalink
In this article, David Katz, the president and COO of Larch Lane Advisors, shares three key lessons for financial advisors and investors on managing a liquid alternatives fund. His expertise stems from Larch Lane Advisors forming a joint venture with Rothschild Asset Management in 2014 to manage the Rothschild Larch Lane Alternatives fund. Lessons from their inaugural year include:
  • Performance and liquidity can co-exist – The fund's managers studied how hedge fund strategies perform individually and in combination. The time-tested strategies were combined in a way that provides diversification and meets the desired risk-return profile without giving up anything. As opportunities arose, the subadvisors were able to adjust exposures dynamically.
  • Most investors have too much equity exposure – The firms utilized what they believe to be the right subadvisor and strategies that, when combined, would be less highly correlated to equities. This included a mixture of currencies, global bonds and commodities. Diversification and disciplined risk management are essential to help mitigate losses.
  • There could be a market shakeout coming – While new funds are coming to the market every day, the stream of new managers will slow, leading to a bifurcation between high-quality funds and funds that are not. In this sense, it is good to stay agile and focus on long-term prospects.
Katz concluded that if the first year of the fund has taught them anything, "it's that digging under the surface is critical, diversification pays off and the unexamined portfolio is probably not worth investing in."
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September 22, 2015 | Permalink
As asset managers face heightened scrutiny from banking regulators over fears their lending and investing activities could pose broader risks to the marketplace, the SEC proposed rules that would require mutual funds and exchange-traded funds to create new programs to better manage their liquidity. Under the rules, funds would need to devise plans to ensure they can meet redemption demands from investors during periods of market stress. These plans would require funds to classify and review the assets in their portfolios based upon how quickly they could be converted into cash. The proposal includes provisions that would allow funds to charge a higher price to investors who make withdrawals during periods of market volatility. The plan would also permit, but not require, funds to use "swing pricing," but calls for additional disclosures related to swing pricing use and how the liquidity of a fund's assets is classified.
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September 18, 2015 | Permalink
Apollo Global Management and OppenheimerFunds formed a strategic partnership that will see Apollo Credit Management serve as a sub-sub-adviser to the $6.1-billion Oppenheimer Global Strategic Income Fund. In return, Apollo will be able to invest in insurance-linked securities. The arrangement is designed to give Oppenheimer investors increased access to Apollo's credit expertise, while also expanding Apollo's presence in the retail investor market. The arrangement is the latest in a series of partnerships involving private equity firms seeking to expand their client base. Last year, Columbia Management teamed up with Blackstone Group to increase retail investors' access to hedge funds, while this year Apollo announced a deal with Ivy Investment Management to offer two new mutual funds.
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September 16, 2015 | Permalink
KKR's acquisition of a quarter of Marshall Wace places the firm back in the race to become the world's leading alternative assets manager, the Wall Street Journal reports. Although widely regarded as one of the premier large buyout firms, KKR has been noticeably slower than Blackstone and Carlyle to build up its other units. By assets under management, Carlyle is about twice the size of KKR and Blackstone is about three times the size. Although it is only initially taking a 24.9% stake in the hedge fund, with options to increase to 39.9% over time, KKR could gain full access to Marshall Wace's $22-billion of AUM. And with Marshall Wace being one of the world's best-known managers, the potential for growth of the combined operation could be significant, the WSJ writes.
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September 16, 2015 | Permalink
In the wake of the recent market volatility, liquid alternative fund managers say their products showed their value, specifically in comparison to equity markets. Firms are now seeking to capitalize by drawing further attention to this in order to attract inflows into their liquid alt products. Although the period of instability was short, the fact that the offerings weathered it as most expected presents a strong opportunity to boost interest from investors. From Aug. 10 to 25, data from Morningstar shows that while the S&P 500 lost 9.99%, even the worst-performing liquid alt category - long/short equity funds - declined by only 5.02%. Meanwhile, bear market funds were the best-performing alternative category with an increase of 15.73%. In addition to touting their performance during such volatility, managers are also using the opportunity to increase awareness among investors about the use of liquid alts to limit exposure within their portfolio in order to hedge against losses during instability and over the long term.
Related News:
Meet the liquid alternative to volatile markets (Video) - Bloomberg
Liquid alts protected portfolios during August selloff - DailyAlts
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September 15, 2015 | Permalink
The SEC, preparing for its second round of cyber-related exams, released a set of questions for advisors and broker-dealers to determine how they are prepared in relation to cybersecurity. The Office of Compliance Inspections and Examinations issued its Risk Alert to provide additional information on the areas of focus for the exams. The exams will mostly take place in fiscal year 2016.
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September 10, 2015 | Permalink
Fund Name: Cushing MLP Infrastructure Fund II
Adviser: Cushing Asset Management LP
Sub-Adviser(s): None
Fees: 1% Management Fee
Open- or Closed-End: Closed-End (Quarterly repurchase; Feeder fund)
Investor Restrictions: Accredited investors
Filing Date: Sept. 1, 2015
Effective Date: Pending
   
Fund Name: CPG York Event Driven Strategies
Adviser: Central Park Advisers LLC
Sub-Adviser(s): None
Fees: 0.65% Management Fee
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: Accredited investors
Filing Date: Aug. 10, 2015
Effective Date: Pending
   
Fund Name: Series Portfolio Trust
Adviser: Weiss Multi-Strategy Advisers LLC
Sub-Adviser(s): None
Fees: 1.6% Management Fee
Open- or Closed-End: Open-End (Mutual fund)
Investor Restrictions: $250,000 minimum initial investment (Class I); $2 million minimum initial investment (Class K)
Filing Date: Aug. 7, 2015
Effective Date: Pending
   
Fund Name: Ivy Apollo Strategic Income Fund
Adviser: Ivy Investment Management Company
Sub-Adviser(s): Apollo Credit Management LLC
Fees: 0.68% of net assets up to $1 billion; 0.62% of net assets over $1 billion and up to $2 billion; 0.58% of net assets over $2 billion and up to $3 billion; and 0.57% of net assets over $3 billion.
Open- or Closed-End: Open-End (Mutual fund)
Investor Restrictions: $750 minimum initial investment.
Filing Date: July 17, 2015
Effective Date: Oct. 1, 2015
   
Fund Name: Ivy Apollo Multi-Asset Income Fund
Adviser: Ivy Investment Management Company
Sub-Adviser(s): Apollo Credit Management LLC
Fees: 0.70% of net assets up to $1 billion; 0.65% of net assets over $1 billion and up to $2 billion; 0.61% of net assets over $2 billion and up to $3 billion; and 0.58% of net assets over $3 billion.
Open- or Closed-End: Open-End (Mutual fund)
Investor Restrictions: $750 minimum initial investment.
Filing Date: July 17, 2015
Effective Date: Oct. 1, 2015
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September 4, 2015 | Permalink
Republican SEC commissioner Daniel Gallagher, who submitted his resignation letter to the White House in May, said he won't stay on at the agency past Oct. 2. Gallagher and Democratic SEC commissioner Luis Aguilar, whose term expires in December 2016, were expected to remain with the SEC until President Barack Obama nominated their replacements. But that process has been delayed after progressive-leaning groups pressured the White House not to replace Aguilar with any corporate lawyers who represent Wall Street clients. Gallagher said he could leave sooner, if his successor is appointed this month. Aguilar said he has "no current plans" to leave the agency.
Related News:
SEC ship won't become a speedboat in wake of Gallagher departure - InvestmentNews
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September 2, 2015 | Permalink
CalSTRS is considering a significant shift away from some stocks and bonds in one of the most aggressive moves by a major pension fund to safeguard against another downturn. The fund is reportedly considering moving up to 12% of its portfolio, or more than $20 billion, into U.S. Treasurys, hedge funds, liquid-alternative funds and other complex investments that it hopes will perform well if markets tumble. Its holdings of U.S. stocks and other bonds would likely decline to make room for the new investments. The fund will also increase commitments to infrastructure projects, while foreign stock holdings could go up or fall, depending on the board's decision. A final decision won't be made until November.
Related News:
Pension giants out of sync with alternative investments - InvestmentNews
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September 1, 2015 | Permalink
Despite the recent market instability, AQR Capital's Managed Futures Strategy fund attracted an estimated $360 million in net subscriptions in the month through Aug. 28, placing it among the top funds in terms of inflows during the period. The open-ended fund is managed by AQR founder Cliff Asness and had $9.135 billion in AUM as of Aug. 31. While analysts are watching liquid alternative funds to measure their performance during the instability, the new investments suggest that many investors remain confident in their ability to endure difficult markets.
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