Tag Archives: brian-haskin

2 More Multialternative Funds Decide To Liquidate

A recent article in the Economist magazine predicted that 2016 could be the first year since “the worst of the financial crisis” that more hedge funds are closed than are launched. Mutual funds and ETFs that pursue hedge-fund strategies – so-called “liquid alts” – have also been shuttering at an accelerated pace, and two more recently announced plans to liquidate: the Collins Alternative Solutions Fund (MUTF: CLLIX ) and the Lazard Master Alternative Portfolio (MUTF: LALTX ). Collins Alternative Solutions Fund According to a February 19 filing with the Securities and Exchange Commission (“SEC”), Collins Capital Management advised the Board of Trustees governing the Collins Alternative Solutions Fund to close and liquidate the fund. New investments were halted immediately, and the fund was planned to be liquidated entirely by February 26. The fund was managed by a number of external sub-advisors. Based on data from Morningstar, the fund had assets of $21.7 million as of the end of January, and returned -14.26% for the 1-year period ending January 31, 2016. Lazard Master Alternative Portfolio On February 24, Lazard announced plans to liquidate its Lazard Master Alternative Portfolio. The fund was closed to new investors as of that date, and it was expected to liquidate on or around March 1. According to Fund Action , Lazard has joined “a long list of providers who have seen funds fall by the wayside after failing to garner enough assets in their alternatives portfolios.” The fund, which debuted on the first day of 2015, generated returns of +0.30% in its first year of operation, but then lost 4.09% in the first two months of 2016. These year-to-date returns through February 29 ranked LALTX in the bottom 15% of funds in its Morningstar category, and undoubtedly sealed its fate. As of the end of February, the fund’s assets under management had dwindled to just $16.9 million. Past performance is not an indicator of future performance. Jason Seagraves contributed to this article.

Video: The World Is Going Passive. Is It A Mistake?

Man Group’s 2016 Unconventional Views video series is designed to present original thoughts and insights that challenge the consensus view. The videos feature leading executives from the firm’s four investment engines, Man AHL, Man GLG, Man FRM and Man Numeric, explaining their views on various investment themes. In recent years, there has been a seismic shift within the asset management industry from active to passive investing. In this video, Ben Funnell, Portfolio Manager at Man GLG, considers this shift and explains why he thinks the growing alpha opportunity in the market is tipping the balance back in favor of active management. He outlines several structural and cyclical reasons to support his argument that today’s investors should take a second look at active management: Fund alpha is more important later in a market cycle, and this alpha is vital for many institutional investors with real growth hurdles and obligations to distribute. The stock-picker’s opportunity set is increasing along with the percentage of stock-specific return, which may represent a structural change. Smart beta may not be so smart, especially since allocating away from active managers still requires active decision-making. Past performance is not indicative of future results. The value of an investment and any income derived from it can go down as well as up and investors may not get back their original amount invested. Opinions expressed are those of the author, may not be shared by all personnel of Man Group plc (‘Man’) and are subject to change without notice.

Brinker Capital Shutters Trio Of Absolute Return Funds

In 2009, Brinker Capital launched the Brinker Capital Crystal Strategy I, which, according to Brinker, was one of the world’s first absolute return strategies packaged in the Separately Managed Account (“SMA”) format. Five years later, the firm launched three alternative mutual funds, each based on the SMA strategy, but with varying investment objectives. Now, just over two years later, all three funds are shutting down, according to a February 22 filing Brinker made with the Securities and Exchange Commission (“SEC”). The three funds in question, all categorized by Morningstar as multi-alternative funds, are the Crystal Strategy Absolute Income Fund (MUTF: CSTFX ), the Crystal Strategy Absolute Return Fund (MUTF: CSRAX ), and the Crystal Strategy Leveraged Alternative Fund (MUTF: CSLFX ). CSTFX sought to provide current income and downside protection to conventional equity markets with absolute (positive) returns over full market cycles as a secondary objective; CSRAX pursued positive (absolute) returns over full market cycles; and CSLFX sought long-term positive absolute return with reduced correlation to conventional equity markets as a secondary objective. Shortly after the three funds were launched in December 2013 , Brinker Capital Vice Chairman John Coyne said, “We had high expectations for Crystal Strategy when we launched it four years ago, but the reception of financial advisors and their clients to the product surpassed anything we could have imagined.” Mr. Coyne also said the funds were launched in response to investor requests, but for the year ending January 31, 2016, all three funds ranked in the bottom 15% of their category: CSTFX posted one-year returns of -9.09% (bottom 15%), CSRAX returned -10.42% (bottom 10%), and CSLFX returned -16.99% (bottom 1%). Thus, it’s no surprise that Brinker decided that it was in the best interests of shareholders to terminate the funds’ operations. According to the SEC filing, all three funds stopped accepting new investors on February 23, and all shares will be liquidated as of March 18. Jason Seagraves contributed to this article.