Displaying items by tag: hedge funds

Fidelity Investments is expanding its alternative offerings with a new private credit fund. According to Ignites, the company registered the Fidelity Private Credit Fund as a ‘40-Act fund structured as a perpetual-term business development company. The fund will be managed by Fidelity Diversifying Solutions, the company’s new alternative unit. The fund, which will focus on lending to smaller firms, is looking to raise between $100 million and $1 billion initially. The fund will allow investors who don’t necessarily meet the requirements needed to invest in private equity, venture capital, or hedge funds. However, it does require them to have a gross income of $70,000 per year or a net worth of $250,000. According to the fund’s prospectus, net fees for the fund will range from 4.89% for institutional shares to 5.74% for S-class shares. It will also have a performance fee of 12.5% each quarter exceeding 5% growth and 12.5% of cumulative realized capital gains from inception through each calendar year.

Finsum:Fidelity is expected to launch a new private credit fund for investors who typically don’t meet the requirements needed to invest in private equity or hedge funds.

iCapital, a leading global fintech platform, announced today that it agreed to acquire UBS Fund Advisor LLC, UBS’s legacy proprietary US alternative investment manager. The agreement also includes the feeder fund platform that UBS manages. The platform, which is also referred to as “AlphaKeys Funds,” represents more than $7 billion in client assets. It includes private equity, hedge fund, and real estate feeder funds. iCapital will now manage and operate the platform, while UBS Financial Advisors continue to serve their high and ultra-high net worth clients that hold feeder funds. UBS became an investor in iCapital in 2017 and entered into a strategic relationship to structure new feeder funds going forward. It also integrated iCapital’s proprietary technology into its private fund operations. In 2021, the partnership was enhanced to further digitize the UBS Advisor experience. The transaction is expected to close sometime this year.

Finsum:iCapital, which has had a long-standing relationship with UBS, is acquiring its Alternative Investments Feeder Fund Platform which represents more than $7 billion in client assets.

Hedge funds are one of the leading experts in volatility management, which is exactly why their latest moves might surprise people as they move into crypto and other digital assets. According to a report from PwC the number of hedge funds investing in digital assets is up to a third, and 11% higher than the previous year. It’s hedge funds' specialty and their namesake that they can utilize similar tactics in traditional markets in digital ones to mitigate risk in their digital exposure through derivatives trading. Specifically short positions are extremely useful in the highly volatile crypto markets. Over three-fifths of crypto specializing hedge funds are using these hedging strategies in their portfolio, and this has allowed them to edge out over traditional bitcoin returns. Another surprising finding in the report is that a vast majority of crypto hedge funds have high-net-worth clients and family office investors.

Finsum: Crypto hedging strategies might just be the key to unlocking the full power o digital assets.

The mainstream financial world is all over the place when it comes to crypto however, Bridgewater Associates is planning on increasing their exposure to digital assets. The firm has made it clear they have some small investments in crypto, Dalio himself advises investors to allocate a small portion of their portfolios into crypto. It will most likely only be a small portion of their $150 billion portfolio but it is in phase 1 of 2. Marshall Wace, Point72 and Brevan Howard have all made crypto investments in the last year.

Finsum: Biden’s most recent crypto executive order legitimizes crypto in many investors eyes because it brings it into the traditional realm.

The hedge fund universe is getting a facelift. It appears the old days of strategic macro or a single quant visionary are a distant memory. Most funds are pouring money into swathes of teams throwing new money at multistrategy. Moreover, it appears clients are increasingly okay with higher fees in exchange for access to a wider range of investments particularly those in more unconventional areas: currency trading, precious metals, and private equity. Funds like Citadel have seen their multi-strategy departments multiply, and it's one of the fastest and near only ways for hedge funds to grow. Multi-strategy has grown 50 percentage points faster than the rest of the industry since 2014Q1.

FINSUM: Diversity is the name of the game and it appears investors are turning to hedge funds to channel funds into a wider net than ever before.