HedgeCo.net (West Palm Beach) – Hatteras Funds has acquired a controlling interest in Alternative Investment Partners, LLC, a Harrison, NY-based provider of open end mutual funds of hedge fund strategies known as AIP Mutual Funds, increasing Hatteras Funds and its affiliated companies’ AUM to approximately $1.6 billion.
The two mutual funds of hedge fund strategies, the Alpha Hedged Strategies Fund (ALPHX) and the Beta Hedged Strategies Fund (BETAX) provide financial professionals with access to alternatives that have all the client-friendly features of a mutual fund, including daily liquidity, no lock-ups, no accreditation requirement, no performance fees, and 1099-tax reporting.
David B. Perkins, CEO and founder of Hatteras Funds, will become Chief Executive Officer of the company, which will be rebranded under the Hatteras umbrella and operate as the mutual fund division within Hatteras Funds upon investor approval of the transaction. Lee Schultheis, Chief Executive Officer and Chief Investment Strategist of AIP Mutual Funds, will remain with the company as President of this division. Mr. Schultheis, along with Asset Alliance Corporation, an original investor in the company, will continue as significant shareholders.
“AIP Mutual Funds is an ideal fit.” said David B. Perkins, Chief Executive Officer of Hatteras Funds. “AIP Mutual Funds had a stroke of genius when it created the structure of these funds, which allow a wider range of individuals to access alternatives. In a post-Madoff world, these mutual funds of hedge fund strategies are a tool for financial advisors to allocate to alternatives while meeting increasing client demands for liquidity and transparency.”
The strategies provide financial professionals with access to alternatives that have all the client-friendly features of a mutual fund, including daily liquidity, no lock-ups, no accreditation requirement, no performance fees, and 1099-tax reporting. The funds actually have a unique structure that allocates assets to a variety of hedge fund managers who run the capital in a separate account from their hedge fund – so the funds do not hold actual shares in a hedge fund. This is how they get around the lock-up and liquidity issues associated with hedge funds.
ALPHX and BETAX may also invest in smaller capitalized companies, foreign securities, securities limited to resale to qualified institutional investors and shares of other investment companies that invest in securities and styles similar to the funds, resulting in a generally higher investment cost than from investing directly in the underlying shares of these funds. Additional information will be filed with the SEC, the company said.
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