CAIS, Citi and Atlantic Fund Services have partnered to create ALTX Trust, the first series trust designed to provide a turnkey solution for hedge fund managers seeking to launch ’40 Act mutual funds.
As part of the trust, CAIS will list newly launched ALTX mutual funds on its platform and provide wholesale distribution services, giving wealth management professionals greater access to these types of vehicles. In addition, Mercer will provide the services it does for all funds listed on CAIS—conducting strategy due diligence, monitoring and rating each new fund. The trust also includes Atlantic Fund Services providing fund administration, governance and compliance support, while Citi’s Investor Services division will be the exclusive global custodian for the trust, and the firm will serve as the preferred prime broker to newly launched alternative mutual funds.
This convergence of hedge funds and mutual funds has been particularly effective at brining retail money to the alternatives space; Citi recently estimated that assets held by U.S. alternative retail mutual funds increased from $95 billion in 2008 to $250 billion in Q4 of 2013.
“Citi has been tracking the rapid evolution of the ’40 Act alternative mutual fund space and sees this as an increasingly important part of our hedge fund client’s product mix going forward,” says Alan Pace, global head of sales at Citi’s Investor Services unit. “We see this platform as an innovative new approach for hedge funds that want to enter the mutual fund space quickly and cost-effectively. We are excited about the opportunity to offer an array of alternative managers, styles and strategies through the world’s largest proprietary custody network.”
The trust plans to launch multiple alternative mutual funds this year from top-tier managers, across a range of hedge fund strategies such as long/short equity and convertible arbitrage, and new quantitative disciplines and specialized asset classes including global currencies and options-writing.
CAIS, Citi, and Atlantic Launch Series Trust For Liquid Alternatives
CAIS, Citi and Atlantic Fund Services have partnered to create ALTX Trust, the first series trust designed to provide a turnkey solution for hedge fund managers seeking to launch '40 Act mutual funds.