Thursday, 3 September 2015
Last updated 1 hour ago
Jan 7 2014 | 2:06am 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."
May 27 2015 | 2:15pm ET
Support Hedge Funds Care, also known as Help For Children (HFC), by participating in this year's raffle. All proceeds go to support HFC's mission of preventing and treating child abuse. Read more…