Drachman Pours a Third Alts Fund for Credit Suisse
Reported by Neil Anderson, Managing Editor
Credit Suisse [profile] has a third offering in its U.S. alternative mutual fund stable. Today Jordan Drachman, head of research for Credit Suisse alternative beta strategies, unveiled the Credit Suisse Liquid Alternative Fund. Drachman serves as lead PM for the fund, which debuted on March 30.
The new fund has A shares for 195 basis points in expenses and 525 bps of load, C shares for 270 bps in expenses and 100 bps in load, and I shares for 170 bps in expenses.
The New York City-based of the Swiss bank's asset management business already offers two other open-end, alternative mutual funds: a commodity fund and a floating rate high income one.
Company Press Release
Credit Suisse's Asset Management Division Launches Credit Suisse Liquid Alternative Fund
New mutual fund offers more transparent, accessible and efficient alternatives exposure
NEW YORK, May 10, 2012 -- Credit Suisse's Asset Management Division announced the launch of the Credit Suisse Liquid Alternative Fund. This innovative product seeks to offer access to hedge fund-like returns, with the flexibility of daily liquidity, increased transparency and 1099 tax reporting. The fund complements the growing suite of alternatives-focused mutual fund offerings available through the Asset Management division of Credit Suisse.
Jordan Drachman, Head of Research for Credit Suisse Alternative Beta Strategies, said, "Hedge funds offer the potential to improve diversification and reduce correlation and portfolio volatility; however, investors needing access to capital are often constrained by hedge funds' illiquid nature, and the process for investing in offshore vehicles can be tax restrictive, lengthy and expensive." Drachman continued, "For investors seeking to enhance the efficiency of their portfolios, we believe the Credit Suisse Liquid Alternative Fund may provide a liquid alternative for accessing the risk and return characteristics of hedge funds without the structural impediments of Limited Partnerships."
Robert Alderman, Head of Retail Distribution for Credit Suisse Asset Management in the Americas, added, "We consider alternative investments to be a critical component of a well-diversified portfolio and we are proud to lead the market with investor-friendly products that fill a void for clients seeking more liquid, transparent and cost efficient access to the alternatives space." Alderman went on to say, "Credit Suisse's Asset Management division has a long history of expertise in alternatives and is one of the industry's largest hedge fund allocators and most established alternative investment solution providers. The Credit Suisse Liquid Alternative Fund is an ideal addition to our product platform."
Credit Suisse has been at the forefront of hedge fund index and replication strategy development, with over a decade of experience as well as one of the industry's largest proprietary hedge fund databases. The Credit Suisse Liquid Alternative Investment Team has been together since 2007 and includes seasoned professionals with a combined 50 years of investment and hedge fund industry experience.
The Fund is offered in Class A (CSQAX) and Class C (CSQCX) shares, both with minimum initial investments of $2,500 (taxable accounts) or $500 (IRAs). The Fund also offers Class I (CSQIX) institutional shares.
For more information on the Credit Suisse suite of alternative mutual fund offerings, please visit www.credit-suisse.com/us/funds.
The fund may not suitable for all investors.
Credit Suisse AG
Credit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 48,700 people. The registered shares (CSGN) of Credit Suisse's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.
In its Asset Management business, Credit Suisse offers products across a broad spectrum of investment classes, including hedge funds, credit, index, real estate, commodities and private equity products, as well as multi-asset class solutions, which include equities and fixed income products. Credit Suisse's Asset Management business manages portfolios, mutual funds and other investment vehicles for a broad spectrum of clients ranging from governments, institutions and corporations to private individuals. With offices focused on asset management in 19 countries, Credit Suisse's Asset Management business is operated as a globally integrated network to deliver the bank's best investment ideas and capabilities to clients around the world.
All businesses of Credit Suisse are subject to distinct regulatory requirements; certain products and services may not be available in all jurisdictions or to all client types.
Important Legal Information
RISK CONSIDERATIONS: All investments involve some level of risk. Simply defined, risk is the possibility that you will lose money or not make money. Before you invest, please make sure you understand the risks that apply to the fund. As with any mutual fund, you could lose money over any period of time. Investments in the fund are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Principal risk factors for the fund include:
CFTC REGULATION: Due to recent Commodity Futures Trading Commission ("CFTC") rule amendments, the disclosures and operations of the fund will need to comply with applicable regulations governing commodity pools, which will increase the fund's regulatory compliance costs. Other potentially adverse regulatory initiatives could develop.
COMMODITY EXPOSURE RISKS: Exposure to the commodities markets may subject the fund to greater volatility than investments in traditional securities.
CREDIT RISK: The issuer of a security or the counterparty to a contract, including derivatives contracts, may default or otherwise become unable to honor a financial obligation.
DERIVATIVES RISK: The fund's use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Derivatives are subject to a number of risks such as commodity exposure risks, interest rate risk, market risk and credit risk.
EXCHANGE-TRADED FUNDS RISK: An investment in an ETF generally presents the same primary risks as an investment in a conventional fund (i.e., one that is not exchange-traded) that has the same investment objectives, strategies and policies. In addition, an ETF may fail to accurately track the market segment or index that underlies its investment objective. The price of an ETF can fluctuate, and the fund could lose money investing in an ETF.
EXCHANGE-TRADED NOTES RISK: ETNs do not make periodic coupon payments and provide no principal protection. The value of an ETN may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities markets, changes in the applicable interest rates, changes in the issuer's credit rating and economic, legal, political or geographic events that affect the referenced commodity. The value of the ETN may drop due to a downgrade in the issuer's credit rating, despite the underlying index remaining unchanged. The timing and character of income and gains derived from ETNs is under consideration by the U.S. Treasury and Internal Revenue Service and also may be affected by future legislation.
FOREIGN SECURITIES RISK: A fund that invests outside the U.S. carries additional risks that include:
Currency Risk Fluctuations in exchange rates between the U.S. dollar and foreign currencies may negatively affect an investment. Adverse changes in exchange rates may erode or reverse any gains produced by foreign-currency-denominated investments and may widen any losses.
Information Risk Key information about an issuer, security or market may be inaccurate or unavailable.
Political Risk Foreign governments may expropriate assets, impose capital or currency controls, impose punitive taxes, or nationalize a company or industry. Any of these actions could have a severe effect on security prices and impair the fund's ability to bring its capital or income back to the U.S. Other political risks include economic policy changes, social and political instability, military action and war.
FORWARDS RISK: Forwards are not exchange-traded and therefore no clearinghouse or exchange stands ready to meet the obligations of the contracts. Thus, the fund faces the risk that its counterparties may not perform their obligations. Forward contracts also are not regulated by the CFTC and therefore the fund will not receive any benefit of CFTC regulation when trading forwards.
FUTURES CONTRACTS RISK: The risks associated with the fund's use of futures contracts include the risk that: (i) changes in the price of a futures contract may not always track the changes in market value of the underlying reference asset; (ii) trading restrictions or limitations may be imposed by an exchange, and government regulations may restrict trading in futures contracts; and (iii) if the fund has insufficient cash to meet margin requirements, the fund may need to sell other investments, including at disadvantageous times.
INDEX/TRACKING ERROR RISK: The fund's portfolio composition and performance may not match, and may vary substantially from, that of the Index for any period of time. Unlike the fund, the returns of the Index are not reduced by investment and other operating expenses. In addition, there can be no assurance that the fund will be able to duplicate the exact composition of the Index, or that the Index will track the performance of the DJCS Hedge Fund Index.
INTEREST RATE RISK: Changes in interest rates may cause a decline in the market value of an investment. With bonds and other fixed income securities, a rise in interest rates typically causes a fall in values, while a fall in interest rates typically causes a rise in values.
LEVERAGING RISK: The Fund may invest in certain derivatives that provide leveraged exposure. The Fund's investment in these instruments generally requires a small investment relative to the amount of investment exposure assumed. As a result, such investments may cause the Fund to lose more than the amount it invested in those instruments. The net asset value of the fund when employing leverage will be more volatile and sensitive to market movements. Leverage may involve the creation of a liability that requires the portfolio to pay interest.
MARKET RISK: The market value of a security may fluctuate, sometimes rapidly and unpredictably. These fluctuations, which are often referred to as "volatility," may cause a security to be worth less than it was worth at an earlier time. Market risk may affect a single issuer, industry, commodity, sector of the economy, or the market as a whole. Market risk is common to most investments - including stocks, bonds and commodities, and the mutual funds that invest in them.
Bonds and other fixed income securities generally involve less market risk than stocks and commodities. The risk of bonds can vary significantly depending upon factors such as issuer and maturity. The bonds of some companies may be riskier than the stocks of others.
NON-DIVERSIFIED STATUS: The fund is considered a non-diversified investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and is permitted to invest a greater proportion of its assets in the securities of a smaller number of issuers. As a result, the fund may be subject to greater volatility with respect to its portfolio securities than a fund that is diversified.
PORTFOLIO TURNOVER RISK: Active and frequent trading may lead to the realization and distribution to shareholders of higher short-term capital gains, which would increase their tax liability. Frequent trading also increases transaction costs, which could detract from the fund's performance.
SPECULATIVE EXPOSURE RISK: Gains or losses from speculative positions in a derivative may be much greater than the derivative's original cost. For example, potential losses from commodity-linked swap agreements and from writing uncovered call options are unlimited.
SUBSIDIARY RISK: By investing in the Subsidiary, the fund is exposed indirectly to the risks associated with the Subsidiary's investments. The derivatives and other investments held by the Subsidiary are generally similar to those that are permitted to be held by the fund and are subject to the same risks that apply to similar investments if held directly by the fund. There can be no assurance that the investment objective of the Subsidiary will be achieved.
Changes in the laws of the United States and/or the Cayman Islands could result in the inability of the fund and/or the Subsidiary to continue to operate as it does currently and could adversely affect the fund.
SWAP AGREEMENTS RISK: Swap agreements involve the risk that the party with whom the fund has entered into the swap will default on its obligation to pay the fund and the risk that the fund will not be able to meet its obligations to pay the other party to the agreement.
TAX RISK: In order to qualify as a Regulated Investment Company (a "RIC") under the Internal Revenue Code of 1986, as amended (the "Code"), the fund must meet certain requirements regarding the source of its income, the diversification of its assets and the distribution of its income. If the fund fails to qualify as a RIC, the fund will be subject to federal income tax on its net income at regular corporate rates (without reduction for distributions to shareholders). When distributed, that income also would be taxable to shareholders as an ordinary dividend to the extent attributable to the fund's earnings and profits. If the fund were to fail to qualify as a RIC and became subject to federal income tax, shareholders of the fund would be subject to diminished returns.
VALUATION RISK: The lack of an active trading market may make it difficult to obtain an accurate price for a portfolio security. Many derivative instruments are not actively traded.
For a detailed discussion of these and other risks, please refer to the fund's Prospectus, which should be read carefully before you invest.
Important Legal Information
From time to time, the fund's investment adviser and co-administrators may waive some fees and/or reimburse some expenses at any time, without which performance would be lower. Credit Suisse Opportunity Funds and Credit Suisse Asset Management, LLC have entered into a written contract limiting operating expenses to 1.95% of the fund's average daily net assets for Class A shares, 2.70% of the fund's average daily net assets for Class C shares and 1.70% of the fund's average daily net assets for Class I shares at least through the fund's first year of operations. Waivers and/or reimbursements are subject to change. Returns represent past performance and include change in share price and reinvestment of dividends and capital gains. Past performance is no guarantee of future results. The current performance of the fund may be lower or higher than the figures shown. The fund's yield, returns and share price will fluctuate, and redemption value may be more or less than original cost. Performance information current to the most recent month-end is available at http://www.credit-suisse.com/us.
Fund shares are not deposits or other obligations of Credit Suisse Asset Management, LLC or any affiliate, are not insured by the Federal Deposit Insurance Corporation and are not guaranteed by Credit Suisse Asset Management, LLC or any affiliate. Fund investments are subject to investment risks, including loss of your investment.
The fund's investment objectives, risks, charges and expenses (which should be considered carefully before investing), and more complete information about the fund, are provided in the Prospectus, which should be read carefully before investing. You may obtain copies by calling 800-577-2321. For up-to-date performance, please visit our website at http://www.credit-suisse.com/us.
CREDIT SUISSE SECURITIES (USA), LLC DISTRIBUTOR. Copyright 2012 CREDIT SUISSE GROUP AG and/or its affiliates. All rights reserved.