Mon, Apr 23, 2018
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. Investing - Sequoia takes Facebook stake as shares slide in data controversy, $1.4b hedge fund sees intact fundamentals for Facebook, Jim Cramer reveals some 'suggested hedge fund trades' amid the Trump tariffs[more]

    Sequoia takes Facebook stake as shares slide in data controversy From Bloomberg.com: The $4.2 billion Sequoia Fund bought a small position in Facebook Inc. as the stock slid late in the first quarter, investment manager Ruane, Cunniff & Goldfarb told clients. "The recent controversy enab

  2. Activist Investors - Blue Sky-owned Wild Breads faces uncertain future[more]

    From AFR.com: A Blue Sky private equity investment in artisan-style baker Wild Breads enjoyed multiple valuation upgrades despite losing millions and breaching its lending covenants, accounts lodged with the regulator last week show. Wild Breads lost $2.4 million in 2017, but Blue Sky ascribed a hig

  3. Opalesque Exclusive: Barnegat to close hedge fund to outside investors on weak opportunities[more]

    Komfie Manalo, Opalesque Asia: Bob Treue's Barnegat Fund Management said it is closing its $666m fixed income relative value hedge fund to outside investors. "The negative side to gains in Fixed Income Arbitrage is that unless we find new opportunit

  4. Investing - Hedge fund makes a big bet on malls, British hedge fund manager Odey short UK government bonds on QE bet[more]

    Hedge fund makes a big bet on malls From Barrons.com: The dominant narrative on American shopping malls is that they're dead. Crushed by Amazon.com, many brick-and-mortar retail stores are destined for bankruptcy. And where is the most retail, clustered all together? Malls. From a

  5. Performance - Hedge funds suffer first back-to-back loss in two years, Netflix performance burns hedge fund short sellers, Macro hedge fund up 14.5% in first quarter sees dollar falling, Renaissance Technologies rebounds across hedge funds in March[more]

    Hedge funds suffer first back-to-back loss in two years From Bloomberg.com: Hedge Fund returns sank for a second straight month in March, the first back-to-back loss since the first two months of 2016, as trade wars, tech-sector woes and a Fed rate hike dragged down the S&P 500 from its