Wed, May 24, 2017
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. Opalesque Exclusive: Time to invest in robotics? (part 1)[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The London-based, Swiss-born manager of the RoboCap UCITS Fund, talks to Opalesque about investing

  2. Investing - Hedge funds have been selling big winners this year, Hedge funds are betting $1 billion that Snapchat shares are going to drop, Here are the biggest bets made by top hedge funds in the first quarter[more]

    Hedge funds have been selling big winners this year From CNBC.com: Hedge fund managers' most popular stock to start the year has been a familiar name that is falling short in terms of performance, while the least popular companies all have been crushing the market. Procter & Gamble

  3. Investing - Third Point's Loeb surfs on as hedge fund washout continues, George Soros has added to his losing bets against the stock market, Hedge funds, VCs and the CIA are throwing money at ex-Bridgewater data scientists' startup, Hedge funds shed retail amid fears of "apocalypse"[more]

    Third Point's Loeb surfs on as hedge fund washout continues From Reuters/Nasdaq.com: Billionaire investor Daniel Loeb said on Thursday that he is still making money even as the hedge fund industry struggles. Loeb, who oversees the $16 billion hedge fund firm Third Point LLC, sa

  4. Investing - Tudor Jones backs AI hedge funds, Massive hedge fund trades highlight insider buying: GE, Pentair, Tempur Sealy, Apollo Global and more, Hedge funds big wigs are buying consumer and selling tech, here's the stocks[more]

    Tudor Jones backs AI hedge funds From FT.com: Hedge fund magnate Paul Tudor Jones has invested in a brace of artificial-intelligence powered "quantitative" hedge funds, underscoring the increasing acceptance that the industry will need to turn more to technology and away from traditional

  5. Soon hedge fund investors won't bet on a man, they will bet on a machine[more]

    From Forexlive.com: The Wall Street Journal is in the midst of a 17-part series that looks at the rise of quant funds. The AUM and money invested in quant funds still trails traditional asset managers but the gap is closing. What's truly amazing is volume. Quant funds make up 27% of trading vo