Firm Preps Private Equity Mutual Fund

Jun 6 2007 | 2:36pm ET

Chappaqua, N.Y.-based Vista Research and Management is rolling out a mutual fund that will invest in listed private equity firms and funds.

The Listed Private Equity Plus Fund is an open-ended mutual fund—it opened for subscriptions this week; the subscription period runs through the end of the month—with all of the flexibility and liquidity that implies. The firm will invest primarily in listed p.e. firms, according to CEO Steven Samson, who adds the fund will also have stakes in listed p.e. funds, business development companies, investment banks—especially boutique I-banks—with large p.e. interests. At least 80% of assets will be in p.e. or p.e. related investments.

Samson said the “hoopla” surrounding the Fortress Investment Group and Blackstone Group initial public offerings helped persuade him that there was a hole in the mutual fund market.

“We are the only actively-managed mutual fund to do this,” he says, “and we’re very proud to be the first.”

While Samson stresses the fund will invest only in listed names and vehicles, he believes that won’t be a handicap. He says the fund has a universe of over 200 names to choose from, and that backtesting has shown the fund’s methodology “does a very good job” of tracking p.e. returns, “especially as the universe has gotten larger.”

“And the correlation to major indices is actually a little lower.”

With the proliferation of listed alternative investment firms, not to mention listed hedge fund and p.e. vehicles in Europe over the past several years, the fund will have a substantial non-U.S. segment in its portfolio, likely about 50%.

The fund, which will begin trading on July 2, charges fees of 2.01% for A shares and 2.76% for C shares—high for mutual funds, but obviously low for p.e. The initial offering price is $10 per share with a minimum initial investment of $1,000.

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