Arden Asset Management
, the $6 billion New York-based fund of hedge funds, has launched a follow-on multi-manager mutual fund as well as a daily liquid UCITS product last month. The firm plans to pursue other retail clients, outside of the exclusive relationship it formed with Fidelity
at the end of 2012. At that time, Fidelity gave Arden $700 million to manage a liquid version of its multi-manager product. The commitment has since grown to $1.1 billion.
"Coming off the exclusivity agreement with Fidelity, we have launched a follow-on program into another domestic 40-Act mutual fund, with Fidelity's permission," said Averell Mortimer
, Arden's chief executive officer.
The second fund will be "more concentrated and somewhat restricted on equity market beta," Mortimer added.
So far, event-driven manager JANA Partners
is the one missing from the Arden Alternative Strategies II Advisor
fund, although it's included in the first Arden Alternative Strategies I
fund. The first fund has 12 managers in it, including hedge fund heavy hitters like CQS
, D.E. Shaw Investment Management
, Chilton Investment Company
, York Capital Management
and Numeric Investors
, among others.
Mortimer said Fidelity was looking at a few firms to run an alternative program as part of its discretionary managed account platform.
"Fidelity had been in the market interviewing candidates and looking to see if they could have a daily liquid version of their hedge fund programs," Mortimer said.
He added that Arden was already thinking about starting up a liquid version of its funds of funds when it was approached by Fidelity. "We were operating on parallel tracks and both exploring the feasibility of this independently and together," he said. Fidelity also did a similar partnership with Blackstone Alternative Asset Management
Mortimer said working with managers on setting up liquid versions of their funds has been no easy task. "There was a degree of skepticism and education that had to occur," he said, adding that some have come around to the idea since. "They realized this is exactly how they'd like their own 401k to be managed," he said. "We now have a very top tier roster of managers that we are working with on our programs and a healthy pipeline to add more," he added.
Traditionally institutional fund of funds firms might find it getting into the retail world difficult at first, but Mortimer said Arden has several relationships with banks, some of which are on-boarding Arden's funds onto their platforms, though he declined to name the specific banks. Arden also tapped third party marketing firm, the Dakota Funds Group
out of Philadelphia, earlier this year to pitch its mutual fund to registered investment advisors.
Stay ahead of the news ... Sign up for our email alerts now