Fri, Mar 6, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Infovest21 Survey: 19% of managers who subadvise '40 Act funds plan to launch '40 Act funds

Tuesday, August 06, 2013
Opalesque Industry Update - In its second '40 Act Survey entitled "Subadvisors: Their Goals and Plans" Infovest21 delved into the mindset of managers about subadvising '40 Act mutual funds i.e. what managers are trying to achieve by being a subadvisor, their rationale for becoming a subadvisor, the challenges they have encountered, why they took the subadvisory route as opposed to launching a '40 Act fund, and what their next step might be in the space.

Of the managers who responded to Infovest's survey, one-half currently subadvise a '40 Act fund, while another 22% are considering subadvising a '40 Act fund. Another 28% are not current subadvising nor considering subadvising a '40 Act fund.

Lois Peltz, president of Infovest21, observed, "Almost 30% of the respondents said they see subadvising '40 Act mutual funds as a way to build assets while another 26% said it was another way to broaden their investor base. Another 18% see '40 Act funds as a way to develop relationships while another 15% see it as way to differentiate from their peers."

Other major findings are:

• When asked why they subadvise to the mutual funds that they subadvise to, one-third cited a longstanding relationship with the sponsor while 27% highlighted the reputation of the sponsor. A better fee structure was mentioned by 13% of those surveyed.

• Almost 46% of the managers said they decided to subadvise a '40 Act fund rather than set up a '40 Act fund because they would be expending fewer resources. Another 32% said they lacked the required resources. Developing existing relationships and generating another source or revenue without too much effort were also cited.

• Almost 60% of the managers said their biggest challenge was lower fees relative to hedge fund fees. Almost 32% didn't like that they could be terminated. Cannibalization of existing hedge fund product and increased compliance were each cited by more than one-quarter of the respondents.

• While 55% of the respondents plan to continue as a subadvisor, another 19% plan to find out more about launching '40 Act funds and another 19% plan to offer a '40 Act fund.

Infovest21 conducted this survey in July 2013 by phone and e-mail.

In June, Infovest21 conducted its first '40 Act fund survey, "Hedge Fund Use of '40 Act Registered Investment Funds"; to determine hedge fund manager use of '40 Act registered investment funds. For a copy of either part 1 or part 2 of the survey, contact Lois Peltz at Infovest21 at 212-686-6440.

www.infovest21.com

Recent related coverage:
30.07.2013 - Infovest21 '40 Act Survey: 53% of managers surveyed have launched or are in the process of launching a '40 Act fund

Bg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SkyBridge opens office in Palm Beach County[more]

    Where better for a southern location than South Florida? SkyBridge Capital, which is headquartered in New York, has opened an office in Palm Beach Gardens. Palm Beach Gardens is a "Signature City" in northern Palm Beach County, with a population of around 49,000.

  2. Outlook - Philippe Jordan predicts 'alternative beta' to displace hedge funds, Stan Druckenmiller says Europe, Japan stocks will outpace U.S.[more]

    Philippe Jordan predicts 'alternative beta' to displace hedge funds From Investordaily.com.au: The disappointing performance of hedge funds in recent years is a result of "too much money chasing too little alpha", argues Capital Fund Management. Speaking to InvestorDaily, CFM partner Phi

  3. Investing - As rig count falls, hedge funds pile into long crude futures, Parus tactically shifts long/short exposure ratios, Mario Draghi outflanking Kuroda as bearish euro bets surge, Prime Capital’s 500.com bet derailed after 41% drop[more]

    As rig count falls, hedge funds pile into long crude futures From 247wallst.com: In the week ended February 27, the total number of rigs drilling for oil in the United States came in at 986, compared with 1,019 in the prior week and 1,430 a year ago. Including 281 other rigs mostly drill

  4. Outlook - 5 reasons why 2015 is looking like a breakout year for alternative investments, Hedge fund manager Dan Loeb predicts disappointment for funds seeking energy distress[more]

    5 reasons why 2015 is looking like a breakout year for alternative investments From Forbes.com: …After a strong 2014, the public markets have been off to a choppy start in 2015. This year, savvy investors may be looking for alpha elsewhere. For many institutions and high-net-worth indivi

  5. Event-driven strategies lead hedge fund gains in February while CTA rally shows signs of fatigue[more]

    Komfie Manalo, Opalesque Asia: Hedge funds ended February on a good note (+0.8%), confirming the positive momentum witnessed since the start of the year, reported Lyxor Asset Management in its Weekly Briefing. As of the end of February, the Lyxor He