1) SEC Signup Draws More Alternatives Managers Than Expected
Pensions & Investments | 3/29/2012
Because…The 1,300 registration applications the SEC expects to receive represent a 70% increase from the 750 advisors the agency estimated last July. Hedge funds have been drawing a growing backlash over high fees, lack of transparency, and lack of regulations. The registration requirement can improve transparency and promote accountability, which should help potential investors perform due diligence. Institutional investors, in particular, are keen to invest with registered managers.
2) RiverPark Introduces RiverPark Long/Short Opportunity Fund
Business Wire | 4/2/2012
Because…Converting an existing hedge fund to a ’40 Act mutual fund can make an investment strategy available to a broader range of investors, although the asset manager has to forgo the common 2/20 fee arrangement. More hedge fund conversions would mean a more competitive playing field for mutual fund firms planning to offer hedge-like strategies, as fund managers can cite the past performance of the hedge fund when marketing the new mutual fund.
3) Pimco’s Total Return Fund Attracts $1.7 Billion in First Quarter
Bloomberg | 4/2/2012
Because…Many people have been asking the question of whether ETFs are cannibalizing mutual funds. The substantial flows into the Total Return Fund, despite the launch of an ETF version, demonstrate that funds with a strong performance record and a reputable manager can still be appealing to investors. The worry that ETFs have posed a lethal threat to the mutual fund industry seems exaggerated at this stage. In addition, the daily disclosure of ETF holdings has not raised the risk of front-running as many have feared.