Growing Pains for Hedge Funds in the Liquid Alts Space

Wealth Management – Some hedge fund managers have had a hard go of it in the liquid alternatives space, the fastest-growing segment of the mutual fund world. They haven’t raised as much money as they thought they would, and many who are in multi-manager funds are frustrated with that model, said Tom Florence, CEO of 361 Capital, during an alternatives outlook event in New York this morning.

“We’re starting to see hedge funds launch mutual funds,” Florence said. “And they don’t really understand the cost of distribution. They don’t really understand the funds themselves—how they work, the legal challenges, the regulatory issues. And it’s not the same as the hedge fund business. It’s very much a distribution business. And they’re not raising the kind of money that they thought they were going to raise.”

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