Mutual fund manager Simple Alternatives on Monday launched its first investment, an institutional hedge fund-of-funds mutual fund, said Bruce MacDonald, the firm’s chief investment officer.
The fund offers daily liquidity with no redemption notice required, and full portfolio transparency, which Mr. MacDonald said were two attributes prized by the institutional investors Simple Alternatives is targeting.
The fund’s all-in fee is 295 basis points Mr. MacDonald said. Most hedge funds of funds charge a 1% management fee and 10% performance fee in addition to the fees charged by the underlying hedge fund managers, typically a 2% management fee and a 20% performance fee.
The equity-oriented fund invests in a concentrated portfolio of between eight and 10 underlying hedge funds, including Courage Capital Management and Argonaut Capital Management.
“Unlike other mutual funds that offer a hedge fund strategy, S1 Fund invests only in institutionally oriented hedge funds,” Mr. MacDonald said in an interview.