The founder of hedge fund administrator GlobeOp Financial Services has launched what he calls the first hedge-fund industry tracker fund.
Hans Hufschmid's New York-based Altß seeks to replicate the hedge fund industry—without the fees or underperforming funds. The vehicle, which has begun investing with $100 million from the firm's executives and their families and friends, seeks to find correlations between funds with similar strategies, using the data to build a portfolio designed to mirror the hedge fund industry.
"The trend is towards indexes in everything," Hufschmid told the Financial Times. "That option exists in equities and in fixed-income, but it does not exist in hedge funds in an efficient manner. What does it even mean to track the industry? There is no FTSE 100 or S&P500 to track."
Instead, Altß relies on a database of 10,000 funds. The firm aims to screen out poorly-run funds from that universe, while overweighting more popular strategies, such as long/short equity.
Hufschmid was most recently CEO at GlobeOp, acquired in 2012 by SS&C Technologies. He founded the administrator after the collapse of Long Term Capital Management, where he was co-head in London.