Family Office Seeds Alternative Mutual Fund With $100M

Jan 7 2014 | 3:06am ET

One major hedge fund investor is taking a big shot at a lower-fee alternative.

New York-based family office Summer Road has pulled about half of its investments from hedge funds and pledged it to a new mutual fund of hedge funds headed by hedge fund manager Brad Balter. Balter's eponymous Long/Short Equity Fund debuted last week with $100 million, all of it from Summer Road.

The new fund has two underlying managers so far: Apis Capital Advisors and Midwood Capital Management. Both firms have produced annualized returns of about 10% since inception, and both will run the same strategy for Balter as they do for their own hedge funds, albeit for less money: Apis and Midwood charge their hedge fund clients 1.5% for management and 20% for performance, while Balter's new fund will charge just 2.19% to 2.54%.

"We've analyzed the equity long/short space pretty carefully, and the lack of consistency of returns coupled with very high fees led us to conclude that the alternative mutual fund product type was a superior value," Summer Road President David Sackler told CNBC. "It's just a better mousetrap."


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of