Pine Grove Asset Management (PGAM) has launched the Pine Grove Alternative Institutional Fund (Alt Instl Fund), its first registered closed-end fund under the Investment Company Act of 1940.
The Alt Instl Fund adds to the fund-of-funds offerings at PGAM, which was founded in 1994 and is one of the oldest, independent firms in the hedge fund industry.
The Alt Instl Fund will provide accredited investors with streamlined access to relative value and event driven hedge fund strategies with a core focus on credit investing.
With the launch of the Alt Instl Fund, PGAM took deliberate steps to convert a private, unregistered fund into a registered '40 Act fund format. The investment goals, strategies and limitations of the registered fund are substantially similar to those of its predecessor unregistered fund, unlike most other registered offerings.
"Continuing to invest in our underlying managers' flagship portfolios was extremely important to us when we constructed this vehicle," says Matthew Stadtmauer, PGAM president. "Since the new Alt Instl Fund acquired the assets of its predecessor fund, it will be one of the only '40 Act funds that benefits from a 16-year performance history."
One means of accessing Pine Grove's new registered closed-end fund will be through CAIS, a financial product platform servicing the independent wealth management community.
"CAIS provides advisors with turnkey access to funds and, with the recent Fidelity–CAIS strategic alliance, CAIS brings broad coverage of the registered investment advisor and broker-dealer community," Stadtmauer says.
The Alt Inst Fund invests into hedge funds that employ a variety of investment strategies, including, but not limited to, distressed credit investing, hedged credit, convertible arbitrage and long/short equity (low net exposure).
"By focusing on credit strategies, we are offering investors exposure to managers who exploit market inefficiencies that most traditional long-only funds are not capturing," says Tom Williams, PGAM chief investment officer. "Our portfolio construction is positioned to handle a potential rise in interest rates as the managers we allocate to usually display negative correlation to high quality bonds."