WEST PALM BEACH, FL (HEDGECO.NET) – Fund of Fund supermarkets have grown in popularity as hedge funds continue to appeal to mainstream investors. According to the San Francisco based Charles Schwab,its fund of funds supermarket has begun to catch on. Schwab said its OneSource Alternative Investment Asset Management platform has doubled in assets during the second quarter.
According to Josh Kernan, director of alternative-investment services for Schwab Capital Markets, the Schwab OneSource platform saw a jump to 100, from 56, in the number of advisers using the platform. Schwab gives access to its platform only through the independent financial advisers for whom it keeps custody of assets, according to company statements.
The Schwab platform was launched last October, and the company hopes to do for hedge funds what it did for mutual funds, by establishing a OneSource shop where investors and managers alike can have access to such investment products. Mr. Kernan said, �We see the platform as a competitive edge, we want to be growing with, or ahead of, our advisers.�
News about the operations of the platform and the identity of advisors using the Schwab platform has been shielded from the public. However, the asset manager said an average of US $100,000 in unspecified number of transactions have been traded through the supermarket Some hedge fund analysts welcome the establishment of the Schwab OneSource Alternative Investment Platform, describing this development as a breakthrough for the dynamically growing hedge fund industry. G. Nicholas, chief executive of HFR Asset Management LLC in Chicago, welcomes this development. Nicholas commented, �The fact that they�ve got it in place is a big step, there�s been a barrier to the smaller investor.� Mr. Nicholas said, his firm �is considering registering hedge funds because Schwab�s platform will eliminate the headaches of dealing directly with hundreds of smaller investors, and he could see Schwab�s new platform bringing in $30 billion within five years.� He also noted that a growing number of investment advisers are looking to increase hedge fund investment allocations in the range of 10-20%.
Paul Oranika
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HedgeCo.Net
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