If you're a hedge fund manager and the thought of setting up a '40 Act mutual fund is giving you a headache, fret not, SEI
is here to help.
The multi-manager platform provider is setting up
its new Advisors Inner Circle Fund III
as a follow up series trust to its existing AIC offerings. The firm, which is a big player in the alternatives, institutional and retail spaces, wants to use its expertise to connect alternatives managers with the retail market and to assist these firms with the nuances of setting up, and managing, a '40 Act fund, explained John Alshefski
, senior vice president in SEI's Investment Manager Services Division.
"We're looking to leverage what we already have in place, as we're well known for our distribution capabilities," Alshefski told MFWire
. Though he noted that the firms SEI considers contracting for the trust tend to be on the larger side and should already have sizable compliance, infrastructure and operations divisions in place to handle the logistics and liquidity demands of '40 Act Funds.
"We're not really looking for start-up managers. They should have good solid operational and compliance infrastructure already," Alshefski said. He added that most of the firms SEI is working with are setting up their mutual funds through SEI specifically for this strategy. “While many managers of private funds want to take advantage of the burgeoning opportunities in liquid alternatives, they are not always equipped to deal with the intricacies of mutual fund governance, distribution, and regulation,” Alshefski said in a release.
SEI has already been overseeing $30 billion in two existing AIC series trusts for the past 21 years and Alshefski said the firm decided to launch the new product in response to more demand for liquid alternatives. The products within the trust will have long-term open ended structures, with the ability to opportunistically allocate among strategies. Though he said SEI will look at more market-neutral and long/short equity strategies in the near term, as there is more appetite for these strategies from investors right now.
SEI's expects to roll out its trust in the second quarter and Alshefski couldn't name the underlying managers before then. He says they will be a combination of hedge funds, funds of funds firms and other asset managers. The fund firms that were part of the first trust included Acadian Asset Management, Rice Hall James & Associates and Westwood Funds, among others.
A team of fund managers comprised of CAIS, Citi and Atlantic Fund Services launched such a series trust
earlier this year and Ultimus Fund Managers has also been in talks with hedge funds to help them get going in the retail world
, as previously reported by MFWire
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