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Rating:A Hedger Puts Down Roots In 40 Act Country Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, November 11, 2014

A Hedger Puts Down Roots In 40 Act Country

Reported by Neil Anderson, Managing Editor

Access Distribution Partners Foreside, and U.S. Bank are helping a hedge fund shop dive deeper into 40 Act country.

At the beginning of the month Glenview, Illinois-based V2 Capital converted its $245-million Hedged Equity Fund into the shop's first mutual fund, no-load, complete with both institutional and investor shares. U.S. Bank handles custody and transfer agency for the new mutual fund, Foreside serves as the fund's distributor, BBD is its independent accounting firm, Bingham McCutchen is providing legal counsel, and Access is helping V2 work with key distribution partners [see prospectus]

The conversion comes after 10-year-old V2 hired Marketfield and AllianceBernstein alumnus Kristin Scherer this spring as managing director and head of global business development.

Prior to converting the fund, V2 was already dipping its toes in the mutual fund waters.

"We started to subadvise a number of 40 Act funds last year," Victor Viner, president and chief investment officer at V2, tells MFWire. "We had a number of funds come to us."

V2 still subadvises three mutual funds, for Persimmions and Granite Harbor, and "right now nothing's changed" for those relationships, Viner says.

As for the hedge fund, which is a long-short concentrated equity strategy that uses index options to hedge, the strategy dates back to 2010, and the hedge fund of that strategy officially launched in April 2012. Viner describes the fund as "net long-biased."

"The strategy didn't have to change to fit into a 40 Act structure," Viner says. "For funds that have a long bias that aren't purporting to be uncorrelated to the equity markets, I think the 40 Act fee structure makes the most sense for the investor."

Viner aims to market the mutual fund in both the institutional channel that V2 already serves and (with the help of Access) the intermediary channel. And other mutual funds may come along, too, but not just yet.

"We do have an advisory business where we've done and continue to do custom mandates for large clients," Viner says. "We have any plans to launch any other funds in the near future." 

Correction: A prior version of this story incorrectly characterized the ownership of Foreside. Foreside Financial Group is independently owned and is unaffiliated with its partner service providers.

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