Simple Alternatives’ S1 Fund, a multi-manager, long/short equity mutual fund, marked its three-year anniversary on 1 October.
"Our goal with the S1 Fund was to deliver the benefits of true hedge fund investing combined with better liquidity and overall transparency for investors," says Jim Dilworth, chief executive and founder of Simple Alternatives. "We have now achieved a solid three year track record and our message is resonating with advisors; that '40 Act mutual funds with daily pricing and liquidity are simply a better way to access the talent of top hedge fund managers."
The growth of liquid alternatives is bringing investment strategies previously reserved for the wealthiest investors to a much broader audience, providing the advisor community with solutions that can be used to reduce correlation, lower volatility and downside risk. The amount of assets invested in '40 Act liquid alternative funds is expected to double by 2018, to nearly USD500bn, according to a recent study by Strategic Insight, a mutual fund industry research firm. Over the next 10 years, alternative mutual funds are expected to grow to comprise close to 14 per cent of all mutual fund assets, according to Cerulli Associates.
"Simple Alternatives is a boutique firm with a single product focus dedicated exclusively to hedge fund access," says Dilworth. "This allows us to concentrate on retaining the best team of long/short equity hedge fund managers for the S1 Fund. They each bring their own unique edge to the portfolio and they all run a legitimate short book focused on alpha generation, rather than just as a hedge."
For years, foundations, endowments and other large financial institutions have come to rely on long/short equity hedge funds to provide a smoother return profile. "We are seeing a strong interest from consultants and financial advisors, many of whom already use hedge funds for their high net worth client portfolios, and increasingly prefer to get part of their long/short equity exposure via a mutual fund rather than limited partnership structure," says Dilworth.