Thu, Jul 28, 2016
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: California-based manager launches long/short equity hedge fund with unique algorithm[more]

    Benedicte Gravrand, Opalesque London for New Managers: SJL Capital LLC, an investment advisory firm based in California, has launched its maiden fund, the SJL MarketDNA Hedge Fund LP. The fund, which began trading

  2. Manny Roman to move from Man to Pimco[more]

    Benedicte Gravrand, Opalesque London: Emmanuel (Manny) Roman, an investment world veteran, has been hired by PIMCO, the large US bond fund house, as chief executive officer. PIMCO's current CEO Douglas Hodge will assume a new role as managing director and senior advisor when Roman joins P

  3. HFR: Hedge funds post strong gains in mid-July as markets recover from Brexit losses[more]

    Komfie Manalo, Opalesque Asia: Hedge funds posted strong gains through mid-July as the equity markets continued the recovery from Brexit losses. The HFRX Market Directional Index gained +2.17% (+4.22% YTD) and the HFRX Global Hedge Fund Index gained +1.03% through mid-month (+0.19%

  4. News Briefs - Carlyle goes on trial for a financial-crisis meltdown, Private equity and venture capital outperformed public markets in 2015, Pippa Middleton gets engaged to hedge fund manager James Matthews[more]

    Carlyle goes on trial for a financial-crisis meltdown Carlyle Group co-founder Bill Conway was in court on this small island last week recounting one of the most bruising episodes in his private-equity firm’s history: the 2008 collapse of mortgage-bond fund Carlyle Capital Corp. Carlyle

  5. …And Finally - Two men fall off cliff playing Pokemon Go[more]

    From BizarreNews.com: Two men who fell from a seaside cliff north of San Diego told authorities they became distracted while playing augmented reality game Pokemon Go. Encinitas fire Battalion Chief Robbie Ford said one of the men fell about 50 feet down the bluff in Encinitas while the other man fe