As demand for alternative strategies packaged as retail mutual funds continues to grow, SEI has launched The Advisors’ Inner Circle Fund (AIC) III with an eye towards helping managers of private funds enter the retail space.
SEI’s Investment Manager Services division is a global supplier of customized operating infrastructure and services to investment organizations representing more than US$13 trillion in assets under management.
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AIC III is the third series trust in the AIC platform that SEI first introduced over 20 years ago and was developed to provide managers with a comprehensive turnkey solution for the operations of retail mutual funds. This solution included an independent board of trustees, compliance program, fund administration, accounting, investor servicing, and distribution services.
AIC III combines the size of SEI’s series trust platform and SEI’s strong background in alternative services with a new fund board experienced in the alternative investment market. The new series trust accommodates sophisticated alternative strategies for U.S. and non-U.S. managers who want to enter the U.S. market.
John Alshefski, senior vice president of SEI’s Investment Manager Services division, said: "While many managers of private funds want to take advantage of the burgeoning opportunities in liquid alternatives, they are not always equipped to deal with the intricacies of mutual fund governance, distribution, and regulation. Our Advisors’ Inner Circle series trust lets managers of private funds jump into the regulated fund market without the expense and lead time involved in setting up their own infrastructure. Our expertise in alternative asset servicing also means we know the challenges our clients face, and puts us in a unique position to help guide our clients into the retail space."
A recent SEI white paper, Private Fund Managers and the Retail Alternatives Phenomenon, cited that a number of high-profile managers of private fund have already launched or filed for retail products.
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By GlobalDataNet new flows to alternative mutual funds more than doubled in 2013, totalling US$40.4 billion, equivalent to 12.5% of all mutual fund flows for the year, according to Strategic Insight. By the end of the year, 411 alternative funds were available, according to Morningstar, compared with the 165 alternative funds available five years earlier.
Mike Beattie, vice president of SEI’s Investment Manager Services division and president of its Advisors’ Inner Circle platform, said: "To succeed in the retail arena, managers of private funds need access to distribution networks and platforms they may have not had to deal with before. They also need a seasoned fund board that can anticipate the complexities involved in bringing alternative strategies into the mutual fund world. Our series trust provides immediate access to those resources."
SEI helped pioneer the series trust concept with the introduction of its first Advisors’ Inner Circle in 1991. The platform has since grown to represent more than US$30 billion in fund assets.
Alshefski added: "We anticipate a spike in demand for series trust services from managers of private funds who are seeking to diversify their revenue streams and package their proven strategies for a much broader market. Those who want to get on board with the trend will need ways to streamline and accelerate their market entry."
