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Rating:A Hedge Fund Makes A Rare Conversion to a Mutual Fund Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, June 23, 2009

A Hedge Fund Makes A Rare Conversion to a Mutual Fund

by: Meredith Mazzilli

In a highly unusual move, a hedge fund made a conversion into a long-short mutual fund structure. New York-based Bull Path Capital Managements Bull Path Long-Short Fund implemented the transformation of its Bull Path Long Short Fund earlier this month. While the hedge fund fell 23 percent last year, it was not a standout in terms of lackluster performance - it still did 20 percent or 30 percent better than the overall market and beat out many long-only mutual funds.

Fund manager Rob Kaimowitz told Dow Jones' Daisy Maxey that performance-related redemptions were not a factor in the switch.

"Every single hedge fund on the planet had redemptions," Kaimowitz said. "We did not have lock-ups, and we tried to do the best we could to be investor-friendly."

In addition, Kaimowitz believes that the long-short structure will attract those burned by the "painful performance" of buy and hold, long-only strategies.

Bull Path will also be launching a long-only mid-cap mutual fund in the form of the Bull Path Mid-Cap Fund. The new funds will be joining an existing field of over 50 long-short mutual funds, and the new Long-Short fund will carry total operating expenses of 224 bps.

Morningstar analyst Benjamin Alper told Maxey that the Baron Partners Fund switchover in 2003 is the only other hedge fund to mutual fund conversion of which he is aware.  

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