Hiring Armored Wolf
as its newest subadvisor is just one of a number of mandates Ascentia Capital Partners
is looking to award in its $35 million Alternative Strategies Mutual Fund (AASFX).
The mutual fund advisor is now looking at filling two additional subadvisor slots for the fund, Stephen D. McCarty
, managing director & chief compliance officer, told the MFWire.com. Meanwhile, Armored Wolf's mandate covers what McCarty describes as a global macro alternatives strategy for the mutual fund. The mandate replaced a slot previously held by long-only manager REX Capital
. With the switch, the fund retains five subadvisors.
McCarty explained that the track record of Armored Wolf chief investment officer John Brynjolfsson played a key role in the firm's selection. Brynjolfsson was a long-time portfolio manager at Pimco where he was managed that firm's commodities fund and its TIPS investments. He will be managing both types of assets for the Ascentia mandate along with an emerging market bond component. In the future, the mandate may also expand to cover currencies.
Armored Wolf also has a subadvisory mandate from Eaton Vance, though in that case it is acting as a long-only manager. The Alternative Strategies Mutual Fund will be the only fund were investors are exposed to its full hedging strategy.
Amored Wolf won the subadvisory mandate on April 18 and Ascentia funded it on May 1.
Meanwhile, McCarty added that Ascentia is now in the process of selecting to additional subadvisors to the fund. One mandate will be for a a merger/arbitrage strategy and the second for a long/short strategy. He explained that the firm will not add competing strategies to those already in the fund nor will it award a mandate to an alternatives manager that competes with one of the existing subadvisors.
"We are looking for strategies and managers to run a variety of strategies," McCarty said. He added that the hunt for a merger/arb strategy "pretty far along" but that "it is not a done deal" and that Ascentia remains open to RFPs and RFIs for both that search and the search for the long/short strategy that he described as being "in the third or fourth inning."
Ascentia is performing the due diligence for the subadvisor search itself.
The three prerequisites for a subadvisor are that the are registered with SEC, provide a fully transparent (at the position level) managed account for the fund and that they charge no performance fees, management fees only, said McCarty.
The Alternative Strategies Mutual Fund invests in mainstream hedge-fund strategies. Research Affiliates, LLC
; DuPont Capital Management Corporation
; Sage Capital Management
, LLC and Dunham & Associates Investment Counsel, Inc.
are subadvisors to the fund along with Armored Wolf.
The fund is sold both on a no-load basis through advisors and offers A shares for front-loaded sales. Its primary distribution is currently through the Schwab, Pershing and LPL platforms.
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