Beverly Goodman of Barron's
had a column this weekend explaining why so many hedge funds are starting mutual funds. It's simple: with their core businesses struggling, they want to attract assets.
"If you sell more products that more people can invest in, you will likely attract assets," she writes. "Genius."
Yet she notes that "the reasons aren't all craven." The funds business is changing, and investors are looking for alternative investments and balking at hedge funds' lockup periods, which makes mutual funds more attractive.
Goodman highlights new funds from KKR
and AQR Capital Management
as possible signs of a changing industry. And now, with the new JOBS Act having lifted restrictions on hedge fund advertising, more hedge funds will start trying to sell to ordinary investors.
The article quotes Morningstar
director of alternative-investment research Nadia Papagiannis, who predicts the effects of the new legislation: "[Hedge funds] can advertise, but not everyone can invest in them. So why not launch a vehicle that everybody can invest in?"
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