Balter Liquid Alternatives has launched the Balter European L/S Small Cap Fund (BESMX) and the Balter Event-Driven Fund (BEVIX), both conversions of existing hedge funds into a mutual fund wrapper.
The Balter European L/S Small Cap Fund is sub-advised by SW Mitchell Capital, a USD2 billion European equity specialist based in London, UK. The Fund has an 8+ year record with an annualised return of 10.6 per cent. Portfolio Manager Jamie Carter uses a bottom up fundamental security selection process. The Fund's investment objective is to generate absolute returns for investors, primarily by investing both long and short in Small Cap European equities. Historical performance of the Fund is provided below.
The Balter Event-Driven Fund is sub-advised by Tiburon Capital Management, a USD75 million hedge fund, based in New York. The Fund has a 5+ year record with an annualised return of +8.3 per cent. Co-Portfolio Managers Peter Lupoff and Brian Swain use their proprietary investment methodology when identifying opportunities. The strategy evaluates Event-Driven investments utilising a bottom up analysis that evaluates the existing capital structure while identifying a revaluation catalyst prior to investing. The fund seeks to provide attractive absolute returns while having a low correlation and high excess returns relative to other Event-Driven funds. Historical performance of the Fund is provided below.
The Balter European L/S Small Cap Fund and Balter Event-Driven Fund expand BLA's offering of cutting-edge mutual fund products that bring genuine hedge fund strategies to the '40 Act space. Each fund intends to provide high quality hedge fund managers running their strategies pari passu to their limited partnership vehicles, rather than the watered-down "hedge fund lite" options that have been commonplace to date. Both funds are conversions, transforming the original hedge fund structure into a mutual fund, thereby preserving each Fund's performance history.
Brad Balter, CEO of Balter Liquid Alternatives, says: "Our differentiation in the marketplace is that we succeed in partnering with hedge fund managers on an exclusive basis to provide not only the same strategy, but the same portfolio that the managers' LP structure has. This is a significant evolutionary step in the liquid alternatives space."
Unlike traditional hedge funds, many alternative mutual funds provide daily liquidity, lower investment minimums, and simplified tax reporting for shareholders, while offering quarterly full transparency of portfolio holdings and lower fees. BLA funds employ the investment approach, risk management and operational due diligence typically available only to institutional and high net worth investors through traditional hedge fund structures.
The Balter European L/S Small Cap Fund is capacity constrained to approximately USD800 million, of which USD500 million will be available for the US market. BLA will hard close the fund once it hits this cap. The Balter Event-Driven Fund will invest both long and short throughout a company's capital structure based on where the most attractive risk/reward opportunities are. BLA believes very few mutual funds take this approach to the Event-Driven space.
"We believe that hedge fund industry dynamics have led to many managers with great records being overlooked by the broader investing public,” says Balter. “Our roots are those of a deep research and due diligence boutique. The skillset and experience our team has developed allows us to bring potential value add limited capacity alternative strategies to the marketplace. We are not interested in constructing mass produced products where the goal is simply to gather assets."
