19/09/17

Fintech firm opens up 'elite' hedge funds for wealth managers

Some of the more esoteric parts of the hedge fund world is to be opened up to wealth managers through a new investment platform, reports CityWire.

The platform, which has been created by alternative investments fintech company Almas, will be rolled out to a select number of wealth managers and advisers in the UK - along with Europe, the Middle East and Asia - towards the end of this year.

The platform, labelled Almas Nexus, will initially hold around 12 hedge funds, which have been registered in Dublin under the Ucits structure.

Almas chief executive and founder Mark Nichols (pictured) describes the funds as 'hidden gems' and 'best of breed'. He expects the number of vehicles to rise to around a maximum of 50, with chief investment officer Larry Newhook responsible for fund selection.

Fund managers will be charged a fee to be on the platform, while wealth managers will pay the same annual fees on the products as those they would expect if they went directly to the firm.

Additionally, intermediaries will be able to access the funds at a significantly lower minimum investment threshold for investors than many of the funds typically require.

Nichols sees his firm as a disruptor, offers investors access to 'elite' managers in a cost-efficient structure.

'The investment community is ripe for disruption and we've built a next generation fintech company,' Nichols told Wealth Manager.

The funds on the Almas Nexus platform will vary across investment strategy, assets under management and tenure of track records.

Almas highlighted that the funds are sub-advised via 'custom mandates', meaning it is 'agnostic to where and how the alpha is sourced'.

When selecting a fund, Newhook's team will focus on three mains areas; alpha persistence over time,  the ability to isolate that alpha via custom mandates and bullet-proof compliance processes and infrastructure. 

'Our sub advisers will not be names that are widely known. Instead, our job is much harder as we provide our clients with access to unique sources of alpha,' the firm said.

Nichols added: 'With decades of experience in the alternative investment world across our team, I believe one of our unique selling points is to unearth the emerging generation of investment management talent, not only well-established names.

'The number of investment products on the platform will grow over time as more high-conviction investment opportunities which fit Almas' criteria are identified.'

While Almas is not in a position to disclose names of fund managers currently on the platform, it gave an idea of the types of vehicles it will contain. These include single-manager funds and structured notes, multi-manager funds and bespoke products.

Nichols said he sees a real opportunity in the UK due to it being a 'less developed market'.

He added: 'In a low-return environment, beset with sustained macro risks, we believe there is an unmet need in the market for wealth advisers and their clients to obtain tailored exposure to elite investment managers across the world.

'Funds on the Almas platform will be structured to extract unique sources of true alpha from sub adviser strategies and reduce typical systematic sources of return.'

New York-based Almas, which specialises in designing bespoke investment solutions for institutional clients, was set up by Nichols in 2015. He has 24 years' experience of advising in the alternative funds industry and, according to his biog, established the first international hedge fund advisory group.