AlphaHedge Capital Partners, LLC (AlphaHedge) has launched a separately managed account (SMA) platform to provide an array of long/short equity hedge fund strategies to high-end investment advisors, consultants, family offices, broker-dealers and institutions.
According to Gregory S Horn, chairman and CEO, a growing number of investment advisors and their clients are frustrated by the high volatility and low returns from equities over the past decade and are interested in less volatile equity exposure. Long/short equity strategies offer advisors an opportunity to potentially lower a client’s equity risk profile without reducing the underlying allocation.
Horn explained that SMAs available via the AlphaHedge platform provide investment advisors with an alternative to the high minimums and limited liquidity of traditional hedge funds and the tax inefficiencies, lack of transparency and elevated fixed fees of alternative mutual funds. AlphaHedge SMAs are distinguished by:
Transparency – All investment strategies are held in brokerage accounts registered under the name of the investor and all securities are directly owned and transparent to the investor. This enables advisors to perform extensive analytics on a strategy at any time.
Liquidity – The strategies are largely liquid and investors have the ability to add to or reduce the capital allocated to their managed account at any time.
The pursuit of equity alpha through long/short managed accounts.
Relatively low SMA minimums – Most AlphaHedge strategies require a minimum of USD250,000, far lower than the minimums of most traditional hedge funds.
AlphaHedge seeks to offer multiple alpha generative long/short equity strategies across market capitalisation ranges, geographic regions, (including domestic, global and international), market sectors and investment style (growth vs. value). By allocating capital to multiple strategies, investors can use AlphaHedge SMAs to further diversify portfolio risk and volatility exposure. The platform has been live since February and is currently running accounts for three strategies. AlphaHedge is in the final stages of deliberation with numerous other talented managers interested in participating on the platform. AlphaHedge’s strategies will initially be launched on the Pershing NetX360 managed account platform.
“We continuously strive to provide our customers with access to the most innovative and valuable business and technology solutions to help them grow their businesses, maximise productivity and mitigate risk," says Jim Dario (pictured), Managing Director of Business Development at Pershing Advisor Solutions, "The addition of the AlphaHedge platform to our NetX360 platform reinforces our firm’s long-standing commitment to deliver industry-leading capabilities to our customers to help them achieve their clients’ financial goals.”
“AlphaHedge’s institutional-quality platform is built to deliver the intellectual capital of hedge fund managers to advisors and their clients in a scalable manner while effectively minimising the customary operational risks that can make advisors and investors reluctant to utilised hedged strategies,” says Kent G Bonniwell, president and COO. In order to expand its reach into the advisor community, AlphaHedge is actively engaged in discussions with other leading custody platforms.
Bonniwell noted that the firm possesses the expertise and experience to conduct rigorous, manager due diligence, led by the established Alternative Strategies research team at its affiliate, Persimmon Capital Management, LP (“PCM”). Through PCM’s experience with proprietary funds-of-funds, the firm expects to continue to leverage its relationship within the hedge fund community to attract other talented hedge fund managers to the program.
Although the platform includes individual managers whose AUM is in excess of USD1billion, AlphaHedge can be especially advantageous to modest-sized and emerging hedge fund managers, Bonniwell said. In today’s environment where hedge fund flows are captured disproportionately by larger players, AlphaHedge offers a new channel for small funds to collect assets, free from the burden of servicing individual client accounts.
Horn and Bonniwell, the founders of AlphaHedge, co-founded ADVISORport, an industry leading third-party managed account platform that pioneered key advances in the managed account industry.