Advance Asset Management will launch its alternative strategies fund, the latest offering in its multi-blend stable, in August with the hope that it can win back advisers and their clients who fled hedge funds as a result of the global financial crisis (GFC).
The Advance Alternative Strategies Multi-Blend Fund had been seeded with about $400 million from Advance's other multi-sector funds and would be launched as a standalone fund in August, the company said at a presentation.
Advance head of investment solutions Patrick Farrell said a key aim of the fund was to provide a more user-friendly alternative strategies investment vehicle.
"We think there's a real place in the market for a fund like this in terms of taking into account a lot of the problems that advisers had in dealing with this space," Farrell said.
"We're here to help them in that respect, and I think it's important because the fund does have the necessary capabilities and attributes that we think a lot of advisers out there are struggling with."
Farrell and Advance alternative assets portfolio manager Chris Thompson said the fund had been built to provide alpha, as well as transparency, low fees and liquidity, which had been seen as lacking in hedge funds prior to 2008.
New York-based manager Ramius Alternative Solutions will help Advance with manager selection, due diligence and portfolio construction for the Advance Alternative Strategies Multi-Blend Fund.
Minimum investment in the wholesale fund is $50,000. It charges a flat fee of 0.98 per cent with a 10 per cent performance fee. The performance fee is capped.
"We're not putting in the market that this is a shoot-the-lights-out alpha type of fund," Thompson said.
"For anything more than 10 per cent outperformance, the performance fee will be capped."
Advance is a unit of BT Financial Group, which is Westpac's wealth management business.
