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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.

Alex Akesson

Editor for HedgeCo.net
alex@hedgeco.net

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Tacoma News Tribune – It was a year of disillusionment, betrayal and excruciating pain for investors.

Wall Street got investing so wrong that the financial system needed an emergency $700 billion transfusion of taxpayer money to avoid collapse, and investors lost trillions of dollars of their life’s savings.

For the regular person with a 401(k), it didn’t help much if they obeyed the lessons of sound investing. Although investors are told that diverse mutual fund choices will help them get through a stock market downturn, the practice didn’t save them from a miserable 2008.

As the stock market plunged more than 50 percent from its October 2007 high, everything but U.S. Treasury bonds suffered drastic losses – real estate, commodities, U.S. stocks, international stocks and even hedge funds, municipal bonds and corporate bonds. As investors panicked and headed for the exits, strong and weak investments were sold. Virtually nothing was immune.

“All 10 sectors within the Standard & Poor’s 500 fell, from a 22 percent slump for consumer staples to a 74 percent thrashing for the financials,” said Standard & Poor’s chief investment strategist Sam Stovall.

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