Financial Services Firm Invests In AlphaHedge Capital

Apr 9 2015 | 9:48am ET

Financial technology and services provider Envestnet has made a strategic investment in AlphaHedge Capital Partners, which provides access to long/short equity strategies through separately managed accounts.

"I often hear in my conversations with advisors that they are concerned about volatility across their portfolios, in equities and bonds, as well as the cost of sitting in cash.  Long/short equity strategies which were previously only available through traditional hedge funds may be an alternative to consider," said Bill Crager, president of Envestnet.  "AlphaHedge delivers a unique platform, offering these strategies in separately managed accounts. We have partnered with them in accordance with our commitment to providing advisors with open access to a wide range of products and solutions." 

Crager will serve on AlphaHedge's Board of Directors.

AlphaHedge seeks to offer multiple alpha-generating, long/short equity strategies across market capitalization ranges, geographic regions, market sectors, and investment styles. According to the firm, by allocating capital to multiple strategies, investors can use AlphaHedge SMAs to help further diversify portfolio risk and volatility exposure.

The platform has been live since February 2015 and is currently running accounts for five strategies launched on two major custody platforms. The firm is in the final stages of review with many long/short equity managers interested in having their strategies represented on the AlphaHedge platform, and is actively engaged in discussions with other custodians.

"AlphaHedge's institutional-quality platform is built to deliver the intellectual capital of long/short equity managers to advisors and their clients in a scalable manner, while seeking to minimize the operational risks that can make them reluctant to utilize hedged strategies," said Kent Bonniwell, president and chief operating officer of AlphaHedge. "Envestnet shares our dedication to ongoing innovation and product enhancements, and we look forward to working with them to deliver carefully selected long/short equity strategies to advisors and investors."

AlphaHedge conducts rigorous manager due diligence in concert with the alternative strategies research team at its affiliate, Persimmon Capital Management. AlphaHedge continues to leverage Persimmon's experience managing hedge fund portfolios, a hedge fund of funds complex, and a multi-manager long/short equity mutual fund to attract hedge fund managers of all sizes and development stages to its SMA platform.

Terms of the transaction, which closed on April 1, 2015, were not disclosed.

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