WFA Advises Clients To Redeem From Equinox's Frontier Funds

Apr 15 2011 | 2:03pm ET

Wells Fargo Advisors is recommending its clients redeem their holdings in the Frontier Funds, a series of hedge fund-like mutual funds managed by Denver, Colorado-based Equinox Investment Management.

WFA spokesman Tony Mattera told FINalternatives that Frontier Funds “was among the list of funds that Wells Fargo Advisors financial advisors were able to recommend to clients but it is no longer, and we did recommend the redemption of these funds.”

In a letter to clients on March 30, 2011, Wells Fargo Advisors explained that the Frontier funds had been under a “hold” status since October 2010, awaiting assessment by a WFA due diligence team. The hold was part of a “comprehensive reassessment of the managed futures offerings made available through Wells Fargo Advisors (WFA), during which some potential issues were identified.”

These issues, says the letter, included “inconsistent application and documentation of the stated investment due diligence process, potential risks associated with self-administering fund operations, potential liquidity and concentrated credit risk stemming from the firm's cash management practices, and potential risks associated with the utilization of total return swaps in select series to obtain certain commodity trading advisor (CTA) exposures, amongst others.”

Equinox, says the letter, “carefully considered these findings and has sought to make corresponding changes in its practices” but the efforts weren’t enough for the due diligence team which recommended that WFA clients redeem assets held in the Frontier Funds.

A call to Equinox for comment was not returned.


In Depth

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR