CHICAGO, April 9, 2015—Envestnet, Inc. (NYSE: ENV) has announced a strategic investment in AlphaHedge Capital Partners, LLC, which provides access to long/short equity strategies through separately managed accounts (SMAs). Terms of the transaction, which closed on April 1, 2015, were not disclosed.
“I often hear in my conversations with advisors that they are concerned about volatility across their portfolios, in equities and bonds, as well as the cost of sitting in cash. Long/short equity strategies which were previously only available through traditional hedge funds may be an alternative to consider,” said Bill Crager, President, Envestnet. “AlphaHedge delivers a unique platform, offering these strategies in separately managed accounts. We have partnered with them in accordance with our commitment to providing advisors with open access to a wide range of products and solutions.” Mr. Crager will serve on AlphaHedge’s Board of Directors.
The SMAs on the AlphaHedge platform are distinguished by:
- Transparency: All investment strategies are held in brokerage accounts registered under the name of the investor, and all securities are directly owned and transparent to the investor. This enables advisors to perform extensive analytics on a strategy at any time.
- Liquidity: Strategies offered by AlphaHedge are largely liquid, and investors have the ability to add to or reduce the capital allocated to their managed accounts at any time.
- Lower Minimums: Most AlphaHedge strategies require a minimum of $250,000, far lower than the minimums of most traditional hedge funds.
AlphaHedge seeks to offer multiple alpha-generating, long/short equity strategies across market capitalization ranges, geographic regions, market sectors, and investment styles. By allocating capital to multiple strategies, investors can use AlphaHedge SMAs to help further diversify portfolio risk and volatility exposure. The platform has been live since February 2015 and is currently running accounts for five strategies launched on two major custody platforms. The firm is in the final stages of review with many long/short equity managers interested in having their strategies represented on the AlphaHedge platform, and is actively engaged in discussions with other custodians.
“AlphaHedge’s institutional-quality platform is built to deliver the intellectual capital of long/short equity managers to advisors and their clients in a scalable manner, while seeking to minimize the operational risks that can make them reluctant to utilize hedged strategies,” said Kent G. Bonniwell, President and Chief Operating Officer, AlphaHedge. “Envestnet shares our dedication to ongoing innovation and product enhancements, and we look forward to working with them to deliver carefully selected long/short equity strategies to advisors and investors.”
AlphaHedge conducts rigorous manager due diligence in concert with the alternative strategies research team at its affiliate, Persimmon Capital Management, LP. AlphaHedge continues to leverage Persimmon’s experience managing hedge fund portfolios, a hedge fund of funds complex, and a multi-manager long/short equity mutual fund to attract hedge fund managers of all sizes and development stages to its SMA platform.
“In today’s environment, where hedge fund flows are disproportionately captured by larger players, AlphaHedge offers a new channel for small funds to focus on the management of client assets while working with a partner to help scale the servicing of individual investor accounts,” said Gregory S. Horn, Chairman and Chief Executive Officer, AlphaHedge.
Mr. Horn and Mr. Bonniwell, the founders of AlphaHedge, also co-founded ADVISORport, a leading third-party managed account platform that pioneered key advances in the managed account industry.
Envestnet, Inc. (NYSE: ENV) is a leading provider of unified wealth management technology and services to investment advisors. Our open-architecture platforms unify and fortify the wealth management process, delivering unparalleled flexibility, accuracy, performance, and value. Envestnet solutions enable the transformation of wealth management into a transparent, independent, objective, and fully-aligned standard of care, and empower advisors to deliver better outcomes.
Envestnet’s Advisor Suite® software empowers financial advisors to better manage client outcomes and strengthen their practices. Envestnet provides institutional-quality research and advanced portfolio solutions through our Portfolio Management Consultants group, Envestnet | PMC®. Envestnet | Tamarac provides leading rebalancing, reporting, and practice management software.
AlphaHedge Capital Partners, LLC is a liquid alternatives platform providing access to strategies from a select group of Long/Short Equity managers in a custodian agnostic, Separately Managed Account format. While past performance is no guarantee of future success, AlphaHedge believes advisers should consider the historical returns and volatility of Long/Short equity strategies, and that advisers should consider them as a complement or substitute for a long-only equity portfolio. The AlphaHedge platform makes available what we believe are carefully researched, complementary strategies that advisers can use to create well-constructed, diversified Long/Short equity portfolios. Advice provided via separate accounts may provide clients benefits vs. investing in a traditional partnership structure or a mutual fund including potentially lower minimums, daily liquidity, position transparency, unique cost basis, 1099 tax-reporting and daily risk management oversight, critical in today’s financial markets.
For more information on AlphaHedge, please visit www.alphahedge.com.
Envestnet and AlphaHedge are unaffiliated firms.