F-Squared Investments has brought in more than USD4 billion in net inflows during the 2011 calendar year, driving total assets under management or model manager agreements to nearly USD6 billion. The firm, which started 2011 at USD1.5 billion in assets, has experienced a growth rate of over 270 per cent for the year and a two-year growth rate of over 2,100 per cent.
F-Squared’s rapid rate of inflows underscores investors’ rising demand for strategies that meet the "Participate and Protect" definition: Ability to participate in rising equity markets yet still offer meaningful protection from significant market declines. The firm’s AlphaSector strategies have become an industry leader in this rapidly growing category.
"Over the past few years investors have spoken – all you need to do is listen. They are now demanding investment solutions that manage risk and return differently," says Howard Present, President and CEO of F-Squared Investments. "The risk of significant loss, high daily volatility, and the so-called ‘Lost Decade’ for equities has conspired to change the playing field. Investors need solutions that participate in equity markets, but also provide superior downside protection."
The firm’s growth in 2011 was based on success across all key lines of business including sub-advising one of the industry’s best-selling US equity mutual funds – the Virtus Premium AlphaSector Fund (VAPAX). For 2011, the Virtus Premium AlphaSector Fund ranked No8 in net inflows among all 2,499 US stock mutual funds tracked by Morningstar.
During the year, F-Squared successfully launched three new business units, including strategically critical efforts targeting the Defined Contribution market and the Hedge Fund/Alternatives market.
"F-Squared continues to build a leadership position in this critical investment segment, one that we are committed to see grow," says Present. "We have a proven and growing suite of products and have bolstered our professional staff with several key hires. We have also built strategic partnerships with high impact investment firms that help us deliver our solutions to the marketplace."
