Hatteras Taps Portfolio Advisors As Sub-Advisor For Core Alternatives Fund

May 2 2017 | 9:51pm ET

Liquid alternatives specialist Hatteras Funds has formed a partnership with Connecticut-based private markets manager Portfolio Advisors to serve as a sub-advisor to the $582 million Hatteras Core Alternatives Fund.

The Core Alternatives fund was formed in 2003 as a way to deliver the potential return enhancement produced by a diversified, seasoned evergreen private investment program complemented by the risk mitigation benefits of a portfolio of hedge funds. Hatteras recently communicated to RIAs and investors that a change in sub-advisor was necessary to improve the fund’s performance and fulfill its commitments to investors, the company said in a statement. 

By incorporating the purchase of secondary interests in private equity, private credit and private real estate funds as a key component to the core fund’s portfolio composition, the fund will be able to maintain a diversified evergreen private investment program while minimizing the J-Curve effect within the portfolio, Hatteras added. 

Accordingly, the company has partnered with an investment team who possessed demonstrated experience, depth, and industry relationships. Additionally, the fund should benefit from more prudent and strategic utilization of hedge fund strategies specifically designed to offer volatility dampening and liquidity management.

“We selected Portfolio Advisors to manage the private portfolio because of their strong long-term performance track record and deep experience across a breadth of private investment strategies,” said Michael Hennen, head of investment management at Hatteras Funds, in the statement. “They possess both the experience, and the necessary relationships, to execute secondary investments successfully,”

Founded in 1994, Portfolio Advisors manages more than $36 billion across private equity, private debt and private real estate investment advisory and portfolio management services to an investor base of more than 1,100 limited partners. 

Based in Raleigh, NC, Hatteras Funds was founded in 2003 by David Perkins. The boutique investment firm provides a range of liquid alternative investment solutions for financial advisors and their clients, including multi-strategy, absolute return, equity long/short, managed futures and debt long/short funds.

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