Preserver Partners has launched a liquid alternatives mutual fund – the Preserver Alternative Opportunities Fund – to provide investors with access to multiple asset classes and strategies in a single diversified portfolio, while providing daily liquidity and transparency.
The new fund trades under the symbols PAOIX and PAORX.
Liquid alternative mutual funds are one of the fastest growing segments in the mutual fund industry as investors and financial advisors seek to hedge downside risk, protect principal and manage volatility. A 2013-2014 Alternative Investment Survey sponsored by McKinsey & Company reports that alternatives represent 12 per cent of mutual fund assets and flows into global alternatives and are expected to grow at an annualised pace of 5 per cent over the next five years, compared to overall industry growth of just 1-2 per cent.
Gerald Laurain (pictured), Chief Investment Officer of Memphis-based FTB Advisors, which manages USD3 billion in assets, says: “We believe alternative investments can be an important source of diversification. The best way for most of our clients to get alternative investments exposure is through liquid alternative mutual funds.”
The investment objective of Preserver’s new fund is to generate attractive risk-adjusted returns, income generation and diversification with less risk than traditional stocks and bonds.
“We like the fact that Preserver looks for under-appreciated, niche opportunities that do not always depend directly on broader market movement to generate a return,” says Laurain. “Accordingly, we believe their strategy may complement our traditional stock and bond positions, enhance portfolio diversification, and reduce volatility,” said John Laughlin, Principal at Summit Asset Management, a USD500 million wealth management firm serving individual and institutional investors.”
Floyd Tyler, Portfolio Manager of Preserver Funds, says: “We are pleased to offer the Preserver Alternative Opportunities Fund to a broader universe of retail and institutional investors using the same investment philosophy that we have used in our private fund. The fund will employ a “fully flexible” investment approach, which allows investing across asset classes and strategies. The Fund will target a 4-5 per cent yield. Unlike many multi-manager alternative funds, the fund has only one layer of investment management fees.
“The fund may initially allocate to reinsurance, commercial and residential mortgage-backed securities, closed-end funds, global common and preferred stocks, and government and corporate fixed income securities. The fund’s opportunistic portfolio structure approach will employ both internal portfolio management and highly qualified sub-advisers.”
