Balter Converts L/S Small Cap Equity, Event Driven Hedge Funds to Liquid Alts

Jan 4 2016 | 6:49pm ET

Liquid alternatives specialist Balter Capital Management has announced the conversions of two exisiting hedge funds into liquid mutual fund wrappers.

Through its Balter Liquid Alternatives LLC unit, the firm has launched the Balter European L/S Small Cap Fund, which trades under the ticker BESMX, and the Balter Event-Driven Fund, which trades under BEVIX. 

The Balter European L/S Small Cap Fund is sub-advised by S. W. Mitchell Capital, a $2 billion European equity specialist based in London, noted the asset manager in a statement. The fund has an 8-year record as hedge fund and an annualized return of 10.6%, according to Balter, utilizing a bottom-up fundamental security selection process. 

The Balter Event-Driven Fund is sub-advised by Tiburon Capital Management, a $75 million hedge fund based in New York. The fund has a 5-year record and an annualized return of +8.3%, according to Balter, and uses proprietary investment methodologies to evaluate event-driven opportunities, including bottom-up analysis of capital structure and potential revaluation catalysts. 

The Balter European L/S Small Cap Fund is capacity constrained to approximately $800 million, of which $500 million will be available for the U.S. market, and will hard close once the fund hits this cap, the company noted.  The event-driven fund will invest both long and short throughout a company's capital structure based on where the most attractive risk/reward opportunities are, an approach the company believes is taken by very few mutual funds in the event-driven space.

Balter’s new funds intend to provide high quality hedge fund managers running their strategies pari passu to their limited partnership vehicles, and as such, are conversions that transform the original hedge fund structure into a mutual fund, thereby preserving performance history.

“Our differentiation in the marketplace is that we succeed in partnering with hedge fund managers on an exclusive basis to provide not only the same strategy, but the same portfolio that the managers' LP structure has,” said Brad Balter, CEO of Balter Liquid Alternatives LLC, in the statement. 

Liquid alternatives provide daily liquidity, lower investment minimums, and simplified tax reporting for shareholders, while offering quarterly full transparency of portfolio holdings and lower fees. 

Balter Capital Management is a boutique research firm focused on hedge fund research and investing.  The company’s Balter Liquid Alternatives LLC division was formed to create and manage daily liquidity alternative mutual funds.

Balter oversees approximately $1.4 Billion in hedge fund and alternative mutual fund assets.  

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