Ramius, the alternative investment management business of Cowen Group, has published a report on the liquid alternative investment space with a particular focus on managed futures investing.
The report, co-authored by Ramius Trading Strategies chief executive officer William Marr (pictured) and principal and director of investment research Alexander Rudin, says the growth of investment in liquid alternatives has accelerated at a rapid pace – fivefold for alternative mutual funds since pre-crisis levels – as retail investors look for access to alternative strategies with daily liquidity.
Managed futures mutual fund assets alone have grown from USD244m in 2006 to USD7.5bn in 2011.
The report says that given the rapid growth of the industry, it is of the utmost importance that potential investors examine a number of criteria when choosing where to put their money to work.
Marr says: “As a result of the financial crisis in 2008, there has been an increase in investor appetite for alternative investments that are more liquid, more transparent, and offered through a stable, regulated investment vehicle. Within Europe this led to significant growth in Ucits funds, and here in the US alternative mutual fund assets have grown exponentially. To date, there are now 323 such mutual funds in the US according to Morningstar and assets have now surpassed USD120bn.
“As more investors look to liquid alternatives for superior portfolio construction, it is important that they truly understand the products and strategies available to them. The Ramius white paper provides research-based selection criteria for the investment community to consider when judging the multitude of products and underlying managers offering these products in order to help them make an informed investment decision.”
