Boston-based Natixis Global Associates has launched two hedge fund beta replication funds in conjunction with AlphaSimplex Group, to be managed by
Boston-based Natixis Global Associates has launched two hedge fund beta replication funds in conjunction with AlphaSimplex Group, to be managed by Dr Andrew Lo, a pioneer in hedge fund beta replication.
The funds will seek to capture the common risk factors or betas of a broad group of hedge funds by using futures, forward contracts and other instruments, and aim to provide investors with the diversification benefits of hedge funds, but with greater liquidity and transparency and at lower cost.
"This is a good time for investors to consider including a hedge fund beta replication fund in their portfolio," Lo says. "Beta replication funds seek to offer the diversification benefits of hedge funds, access to a broader set of asset classes and low correlation to traditional asset classes, while avoiding some of the downsides such as illiquidity, limited capacity and high fees."
The new funds are the ASG Global Alternatives Fund, a fund established under the US Investment Advisers Act of 1940 and available only to US investors, and the ASG Laser Fund, a sub-fund of Natixis International Funds (Lux) I, a Luxembourg-domiciled Ucits.
AlphaSimplex uses proprietary quantitative techniques to estimate the changing betas of a large number of individual hedge funds, and then seeks to capture those betas using futures and forward contracts and other instruments, providing investors with long and short exposures to equity, interest rate, currency and commodity markets around the world.
The ASG Laser Fund will be available immediately to non-US retail and institutional investors in Luxembourg and other jurisdictions where the fund has been authorised. The ASG Global Alternatives Fund will be available initially through institutional class shares, to be followed by A and C share classes in the coming months.
"These new funds are an example of the innovative solutions that we provide for our clients," says John Hailer, president and chief executive of Natixis Global Asset Management for the US and Asia and head of US and international distribution.
"Andrew Lo and the AlphaSimplex team are delivering cutting-edge investment solutions that address the problems investors face every day, including the need for portfolio diversification in a time of extreme market volatility. This is a perfect illustration of how our multi-boutique structure and collection of varied investment managers can provide one-stop shopping for clients."
AlphaSimplex Group, which offers a suite of alpha-generation and beta-capture strategies including hedge funds, replication products, and global tactical asset allocation strategies, was founded in 1999 by Lo, a professor of finance at the MIT Sloan School of Management.
Natixis Global Associates is the distribution arm of Natixis Global Asset Management and operates from 12 worldwide offices. Natixis Global Asset Management, which was one of the 15 largest asset managers in the world at the end of June with USD890bn under management, is part of Natixis, the investment and projects bank of France’s Banque Populaire and Caisse d’Epargne groups.
