Opus Fund Services to Acquire AlphaMetrix360 Administration Business

Opus Fund Services will acquire the administration business of AlphaMetrix360, sources have confirmed.

The business will transition to Opus Fund Services likely before the end of the year.

AlphaMetrix360, the private investment platform and commodity pool operator (CPO) ran into “significant cash flow issues”. In a letter sent to investors in October, the company said the CPO had assets, which largely consisted of a receivable owed to the parent company, AlphaMetrix Group, and with these cash issues, the CPO and the parent company’s liabilities “greatly exceed their liquid assets”. The company hired accounting firm Arthur Bell to help address these financial problems.

The latest deal will see the transition of clients and potentially some staff, Global Custodian understands. Clients will receive the services of Opus and the resources currently provided by AlphaMetrix 360 to ensure a seamless transition of the business.

It is understood that a court appointed corporate monitor and AlphaMetrix’s senior secured lender have approved the deal.

While AlphaMetrix company tries to maintain the solvency of the CPO, an immediate consequence of the cash flow issues have been a delay in fee rebates to third party money managers and participants, which were not reinvested into various pools as they should have been, thus affecting the net asset value of the pools.

The issues with AlphaMetrix highlight the counterparty risks that hedge fund investors face when custody is paired with investment management, as is the case with the CPO and most commingled hedge fund structures.

Opus and AlphaMetrix360 were unavailable for comment.