Thu, Dec 14, 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. Mediobanca acquires majority stakes in Swiss hedge fund[more]

    Komfie Manalo, Opalesque Asia: Listed diversified banking group Mediobanca SpA said it has acquired a majority stake in Geneva-based hedge fund firm RAM Active Investments SA (RAM AI), an active and alternative asset manager offering a range of act

  2. North America - Miami could attract hedge funds if SALT deductions axed[more]

    From Law360.com: For years, inertia has been Nitin Motwani's greatest foe in his attempts to lure hedge fund owners in the northeast to Miami, which he has pitched as a tropical low-tax paradise. But with the Republican tax bill proposing to eliminate deductions for state and local taxes, he's sensi

  3. Northleaf Capital Partners closes debut private credit fund on $670M[more]

    Bailey McCann, Opalesque New York: Northleaf Capital Partners has closed its debut private credit fund - Northleaf Private Credit I - on $670 million. The vehicle will invest in private credit transactions in Europe and North America, with a primary focus on lending to private equity-backed compa

  4. ...And Finally - The ongoing gun saga in the U.S.[more]

    From Newsoftheweird.com: As elder members of the First United Methodist Church in Tellico Plains, Tennessee, gathered on Nov. 16 to discuss the recent church shooting in Sutherland Springs, Texas, one of those present asked if anyone had brought a gun to church. One man spoke up and said he c

  5. Opalesque Exclusive: Credit Suisse Asset Management's NEXT Investors leads $6M Series A round for LUX Technology and Services[more]

    Bailey McCann, Opalesque New York: Credit Suisse Asset Management's NEXT Investors has led a $6 million Series A funding round for LUX Technology and Services, a business and technology solutions provider for the alternative assets industry. The investment will be used to fuel growth of Trans