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Alternative Market Briefing

40 Act fund space is promising but some funds may not have true liquidity

Monday, December 02, 2013

amb
Scott Schweighauser
Benedicte Gravrand, Opalesque Geneva:

Panelists at the recent Alternative Assets Summit in Las Vegas said that costs to bring a '40 Act to market had dropped significantly and that it now takes around four months to structure a fund. Indeed, now a lot of U.S. alternative fund managers are launching '40 Act hedge fund-style mutual funds (funds registered under the Investment Company Act of 1940), the most recent being Franklin Templeton and K2 Advisors, Morgan Creek and Blackstone Alternative Asset Management.

Despite some of the unknown challenges, many of the hedge fund managers and funds of funds involved in '40 Act funds feel the game is just beginning, said a recent report from Infovest21, a research firm. Only about 1.1% of all mutual fund assets i.e. $108 billion are currently in alternative '40 Act funds, according to Morningstar. But ......................

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