AlphaHedge Launches SMA Platform

AlphaHedge Capital Partners said it has launched a separately managed account (SMA) platform to provide an array of long/short equity strategies to high-end investment advisors, consultants, family offices, broker-dealers and institutions.

A growing number of investment advisors and their clients are frustrated by the high volatility and low returns from equities over the past decade and are interested in less volatile equity exposure, comments Gregory Horn, chairman and CEO of AlphaHedge in the company’s release. Long/short equity strategies offer advisors an opportunity to potentially lower a client’s equity risk profile without reducing the underlying allocation, added Horn.

The platform has been live since February and is currently running accounts for three strategies.

Horn explained that SMAs available via the AlphaHedge platform provide investment advisors with an alternative to the high minimums and limited liquidity of traditional hedge funds and the tax inefficiencies, lack of transparency and elevated fixed fees of alternative mutual funds.

Among the distinguishing features of AlphaHedge are:

Transparency: all investment strategies are held in brokerage accounts registered under the name of the investor. This enables advisors to perform extensive analytics on a strategy at a time.

Liquidity: The strategies are largely liquid and investors have the ability to add to or reduce the capital allocated to their managed account at any time.

Relatively low SMA minimums: Most AlphaHedge strategies require a minimum of $250,000, far lower than the minimums of most traditional hedge funds, according to the company.

The pursuit of equity alpha through long-short management accounts.

AlphaHedge’s strategies will initially be launched on the Pershing NetX360 managed accounts platform.

According to Kent G. Bonniwell, president and COO, in the release, “AlphaHedge’s institutional-quality platform is built to deliver the intellectual capital of hedge fund managers to advisors and their clients in a scalable manner while effectively minimizing the customary operational risks that can make advisors and investors reluctant to utilized hedged strategies.” In order to expand its reach into the advisor community, AlphaHedge is actively engaged in discussions with other leading custody platforms.

Bonniwell noted that the firm has the expertise to conduct rigorous, manager due diligence, led by the established Alternative Strategies research team at its affiliate, Persimmon Capital Management, LP. Through PCM’s experience with proprietary funds-of-funds, the firm expects to continue to leverage its relationship within the hedge fund community to attract other talented hedge fund managers to the program.

Some of the hedge funds on the platform have in excess of $1 billion AUM, but AlphaHedge can also be effective for modest-sized and emerging hedge fund managers, stated Bonniwell. AlphaCapture offers a new channel for small funds to collect assets, from the burden of servicing individual accounts, Bonniwell, added in the release.

AlphaHedge founders Horn and Bonniwell were previously the co-founders of Advisorport, a third-party managed account platform that pioneered advances in the managed account industry, the company said. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio