Company Press Release

Virtus Investment Partners and Cliffwater LLC Announce Partnership to Offer Liquid Alternative Investments

Files for three multi-strategy alternative mutual funds

HARTFORD, Conn. and LOS ANGELES, Oct. 28, 2013 -- Virtus Investment Partners, Inc. (NASDAQ: VRTS), which operates a multi-manager asset management business, and Cliffwater LLC, a leading advisory firm that provides institutional investors with portfolio diversification through alternative investments, today announced they have established Cliffwater Investments LLC, an investment adviser that will subadvise a series of multi-strategy, multi-manager alternative mutual funds for retail investors.

The new venture will leverage Cliffwater's expertise in portfolio construction and its in-depth research of more than 4,000 alternatives managers. Its open-architecture approach to selecting managers is utilized by some of the largest institutions, pension funds and endowments. Cliffwater has approximately $70 billion of assets under advisement, including approximately $52 billion in alternative strategies.

The first set of funds that will be subadvised by Cliffwater Investments will be Virtus Alternative Total Solution Fund, Virtus Alternative Income Solution Fund, and Virtus Alternative Real Assets Solution Fund. Each fund is intended to improve an investor's risk/return profile through diversification and lower correlation to the broad equity and fixed income markets and will feature allocations to multiple alternative strategies from leading hedge fund and alternative investment managers sourced and rated by Cliffwater. Virtus has filed a registration statement with the Securities and Exchange Commission for the three funds.

"There is a growing understanding among financial advisors that portfolios constructed primarily with traditional equity and fixed income securities are reliant on an ongoing bull market and low interest rate environment to address their clients' needs," said George R. Aylward, Virtus' president and chief executive officer. "In order to meet their long-term financial goals, investors need to consider alternative strategies that typically have been available only to institutional investors and high-net-worth clients. Through our partnership with Cliffwater, we can give clients access to institutional-quality alternative investment managers in a retail mutual fund that has the benefits investors appreciate: daily liquidity, timely tax reporting, transparency, and affordability."

"We are leveraging Cliffwater's expertise in alternative investments to develop open-architecture, multi-strategy, multi-manager alternatives funds. Cliffwater is well-regarded as an alternatives research and advisory firm, and with its institutional experience and disciplined approach to risk management, manager sourcing, and portfolio construction, it is the right partner to help us solve the evolving needs of retail investors," Aylward said.

"Institutions have long embraced alternative investments because they understand the benefits of generating more consistent returns and better managing their risk profile," said Stephen Nesbitt, chief executive officer and founder of Cliffwater LLC. "For the past decade, we have provided institutional clients with full-service support for their alternative strategies. Our experience with the largest and most sophisticated institutional investors, proprietary analytical tools and distinctive research approach gives us extensive access to some of the best alternative managers."

"Both Cliffwater and Virtus bring to the partnership unique skills and expertise that, when combined, can produce significant opportunities for the retail investor," Nesbitt added. "We conducted an extensive search to find the best asset management partner to bridge the gap from serving large institutional clients to retail investors, and after meeting with many mutual fund firms, it was obvious that Virtus had the right combination of leadership, experience and market position that Cliffwater was looking for in a long-term strategic partner."

About the funds

The three new "Virtus Alternative Solution" funds are solutions-oriented and designed to use multiple diversified strategies and managers to emphasize total returns across all market environments to give investors the ability to reach their financial goals.

Cliffwater Investments, the funds' subadviser, will assist the funds' adviser in implementing a multi-stage process that incorporates a disciplined, top-down tactical asset allocation process with bottom-up manager research, selection and ongoing due diligence. Each fund will utilize a variety of alternative strategies subadvised by a collection of leading alternative managers rated by Cliffwater.

The three funds, expected to be available to investors in the first quarter of 2014, are:

• Virtus Alternative Total Solution Fund. The fund combines a diversified collection of alternative (income, real assets and long/short) strategies designed to provide the opportunity to generate a positive total return in various market cycles while aiming to maintain a low correlation to traditional equity and fixed income markets.

• Virtus Alternative Income Solution Fund. The fund is focused on capturing current yield from a diversified combination of income producing securities.

• Virtus Alternative Real Assets Solution Fund. The fund is constructed to help investors protect their purchasing power by producing a total return that exceeds the rate of inflation over the course of a full market cycle.


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