CAIS, Citi and Atlantic Fund Services Announce Collaboration on Turnkey Solution to Launch Alternative Mutual Funds
New ALTX Trust is One-Stop Option for Hedge Funds to Launch & Distribute Mutual Funds Quickly & Efficiently
Three leading industry service providers, CAIS, Citi and Atlantic Fund Services have collaborated to create ALTX Trust, the first series trust designed to provide a turnkey solution for hedge fund managers that seek to launch ’40 Act mutual funds. The collaboration of these firms brings together the capabilities and services required to successfully launch and distribute alternative mutual funds, alleviating the need for significant operational infrastructure hedge funds would otherwise need to build internally.
CAIS, with its expansive footprint in the RIA and broker-dealer network, will list newly launched ALTX mutual funds on its platform and provide wholesale distribution services. As with all funds listed on CAIS, Mercer will conduct strategy due diligence, ongoing monitoring and provide each new fund with a rating. Atlantic Fund Services will provide fund administration, governance and compliance support, while Citi’s Investor Services division will be the exclusive global custodian for the trust, and will serve as the preferred prime broker to newly launched alternative mutual funds.
The launch of ALTX Trust comes at a time when investor demand for premier liquid alternative mutual funds is rapidly increasing. Citi recently estimated that assets held by U.S. alternative retail mutual funds increased from $95 billion in 2008 to $250 billion in Q4 of 2013. In 2014, ALTX Trust intends to attract top tier hedge fund managers and plans to launch multiple alternative mutual funds. Strategies for these new funds will include both traditional hedge fund styles, such as long/short equity and convertible arbitrage, to new quantitative disciplines and specialized asset classes including global currencies and options-writing.
Alternative mutual funds often pursue low correlations with traditional asset classes, which makes them attractive when building and diversifying portfolios. “Expanding our existing funds menu to include alternative mutual funds is a natural extension of our platform and our wealth management clients will benefit from broader product selection, said Rafay H. Farooqui, co-founder and President of CAIS. “With the combined experience and market credibility of these service partners, the ALTX Trust will be the venue of choice for top hedge funds looking to extend their investment offerings,” Farooqui added.
Series trusts have long served as a cost effective way for investment managers to participate in a registered fund without having to manage an SEC-registered legal entity themselves. “Launching and providing ongoing supervision, administration and compliance for ’40 Act mutual funds has been our core business since the 1980s,” said John Y. Keffer, Chairman of Atlantic Fund Services which is known for its pioneering work in development of the umbrella series trust for unaffiliated investment managers. “With the establishment of the ALTX Trust platform, we are excited to have a dedicated series trust that will focus on the fast-growing alternative space.”
“Citi has been tracking the rapid evolution of the ’40 Act alternative mutual fund space and sees this as an increasingly important part of our hedge fund client’s product mix going forward,” said Alan Pace, Global Head of Sales at Citi’s Investor Services unit. “We see this platform as an innovative new approach for hedge funds that want to enter the mutual fund space quickly and cost-effectively. We are excited about the opportunity to offer an array of alternative managers, styles and strategies through the world’s largest proprietary custody network.”
Since the launch of the CAIS platform, Mercer has provided investment and operational due diligence on all managers that list on CAIS. The global financial consulting leader will offer ALTX Trust fund managers thematic portfolio guidance and analytic tools, including quantitative analyses and risk assessments of alternative investments, model portfolios, research and ongoing educational resources and support.
“We think that this partnership is an important step in the evolution of hedge fund distribution, as it will make a broader array of alternative investment strategies accessible to individual investors, defined contribution plans, and smaller institutions,” said David Eisenberg, the US segment lead for Wealth Managers at Mercer.
For more information, please visit www.altxtrust.com or contact [email protected].
About Atlantic Fund Services
Atlantic Fund Services offers turnkey services for launching and administering investment funds in many structures including mutual funds, series trusts, ETFs, UCITs and pooled vehicles. With 30 years of experience as a third-party fund administrator, Atlantic has a reputation for delivering consistently high levels of service quality. www.atlanticfundservices.com
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
Additional information may be found at www.citigroup.com
About ALTX Trust
ALTX Trust provides hedge fund managers with a single solution to offer alternative strategies in a mutual fund format. ALTX goes beyond the traditional efficiencies of a series trust to offer superior business capital advisory services and the critical element of distribution. www.altxtrust.com
CAIS is the leading alternative investment platform for financial advisors who seek improved access to, and education about, alternative investment funds and products. CAIS provides financial advisors with a broad selection of alternative investment strategies, including hedge funds, private equity, private credit, real estate, digital assets, and structured notes, allowing them to capitalize on opportunities and/or withstand ever-changing markets. CAIS also offers custom solutions for advisors seeking to create custom fund vehicles around ideas they source.
CAIS also provides an industry-leading learning system, CAIS IQ, to help advisors learn faster, remember longer, and improve client outcomes.
All funds listed on CAIS undergo Mercer's independent due diligence and ongoing monitoring. Mercer diligence reports and fund ratings are available to advisors on the CAIS password-protected platform. CAIS streamlines the end-to-end transaction process through digital subscriptions and integrated reporting with Fidelity, Schwab, and Pershing, which make investing in alternatives simple.
Founded in 2009, CAIS, a fintech leader, is empowering over 8,300 unique advisor firms/teams who oversee more than $3T in network assets. Since its inception, CAIS has facilitated over $21B in transaction volume as the first truly open marketplace where financial advisors and asset managers engage and transact directly on a massive scale. CAIS has offices in New York, Los Angeles, Austin, and San Francisco. For more information about CAIS, please visit www.caisgroup.com.
Securities offered through CAIS Capital LLC, member FINRA, SIPC.
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