A Reno financial company has launched a mutual fund that seeks to combine the scope of alternative investments found in hedge funds with the transparency and liquidity of a publicly traded mutual fund.
The Ascentia Alternative Strategies Fund has about $10 million under management as its parent company, Ascentia Capital Partners LlC, steps up marketing of the fund.
The fund was launched in March, and securities regulators limit the amount of marketing that can be undertaken for mutual funds that are less than 90 days old.
Stephen McCarty, who heads operations and compliance for Ascentia Capital, says the new fund is marketed to independent investment advisors and brokers.
The company just signed on three sales representatives in major markets, and it's looking for a couple more to complement an aggressive online marketing effort, says McCarty.
"The chore now is education," he says.
Ascentia Alternative Strategies Fund occupies a small corner in the mutual fund universe as it's one of less than 60 funds that look to investments in nontraditional areas such as commodities, foreign equities, bonds and short sales of equities.
And within that small sector, Ascentia is one of only three that uses a multi-advisor strategy to set the fund's direction.
Along with Reno's Adagio Capital Management, advisors to the fund include Florida's Sage Capital Management, Research Affiliates LLC of Pasadena, Calif., and REX Capital Advisors LLC of New York City.
Peter Lowden, chief investment officer of Ascentia Alternative Strategies Fund, says investors who have been burned by the decline in U.S. equities markets are open to hearing the pitch from the Reno company about the use of alternative investments.
Since its inception in early March, the fund has delivered a 2.54 percent return compared to a 3.2 percent decline in the S&P 500.
"We just got lucky that way, but we'll take it," Lowden says. "We think it's going to be a tough stock market for the foreseeable future."
Long positions in the Ascentia Alternative Strategies Fund recently included 11 percent allocated to international large-cap companies, 9.5 percent in agricultural commodities and 6.4 percent in natural resources.
It held short positions in large-capitalization U.S. stocks and in emerging markets.
Ascentia markets the fund as a way for individual investors to diversify their holdings without facing the high minimum investments, lack of transparency and lack of liquidity they are likely to find in traditional hedge funds.
The new mutual fund is no-load. Annual operating expenses including management fees of 1.95 percent total 3.01 percent. US Bank handles the fund's back-office administrative chores.
Assuming the alternative investments fund gets some traction, McCarty says Ascentia Capital has several other mutual funds under consideration.
Ascentia Capital, the parent company of the new fund, was launched in 2005 by investment industry veterans McCarty, Lowden and Robert Jorgensen. It manages private investment accounts.
