361 Capital, an asset management firm specialising in liquid alternative investments, is to expand its family of alternative mutual funds by launching a series of funds that will be sub-advised by single managers.
In contrast to the alternative mutual funds that use multiple managers, 361 Capital’s new funds are expected to be single-manager strategies.
The firm plans to partner with hedge fund managers and successful managers of alternative mutual funds, who will serve as sub-advisors.
Distribution will be carried out through a hybrid strategy that leverages marketing automation, technology and a strong sales force, with a primary focus on reaching registered investment advisors.
“With the growth of liquid alternatives that is expected over the next five years, particularly among hedge funds looking to enter the ’40 Act space, we believe there is an opportunity to expand our fund offerings,” says Tom Florence, CEO of 361 Capital. “We believe we are well positioned to take advantage of that opportunity because of our track record with the 361 Managed Futures Strategy Fund, a counter-trend strategy, and our success raising money through financial advisors.”
The first new fund to come out of this expansion is the 361 Global Macro Opportunity Fund, which will be managed by Blaine Rollins, a veteran of Janus Capital Group. This fund will seek a long-term positive absolute return by investing in a wide range of asset classes that provide exposure principally to US and foreign equity securities, fixed income securities, commodities and currencies, and may invest in various individual securities and currencies as well as indices based on a broad range of individual securities, commodities and currencies. This fund is expected to be operational by 1 July.
Liquid alternatives have seen strong industry growth, outpacing traditional hedge funds, according to “Going Mainstream: Developments and Opportunities for Hedge Fund Managers in the ’40 Act Space,” an April 2014 study by Barclays Prime Services. The study found that in 2013, liquid alts assets grew by 43 per cent, while hedge funds saw just 15 per cent growth. And they still have plenty of room to grow. Liquid alts make up only one per cent, or USD137 billion, of the USD13.2 trillion US mutual funds industry, according to the Barclays study, which estimates that liquid alternatives assets will reach USD650 billion to USD950 billion by 2018.
“Demand for liquid alternatives strategies continues to grow, as advisors increase allocations and adopt more sophisticated strategies,” says Florence. “We believe we can help great money managers diversify their product offerings and distribution channels, while developing innovative liquid products built for today’s alternative investments environment.”
