Fidelity Investments is providing retail clients access to hedge-fund firms through a mutual fund launched in partnership with Arden Asset Management, according to a published report.
Fidelity officials confirmed that the mutual fund opened for business last week with over $750 million from Fidelity. It had investments with nine managers: Babson Capital Management, Chilton Investment Company, CQS, Eclectica Asset Management, Jana Partners, Estlander & Partners, MatlinPatterson Global Advisors, Numeric Investors and York Registered Holdings, according to its Securities and Exchange Commission filing.
Arden manages $7.5 billion in hedge-fund investments on behalf of pensions and other large institutional investors. The move to make the new fund available to Fidelity clients marks the latest effort by a hedge-fund specialist to mine the sprawling retail market for assets.
Blackstone Group, according to The Wall Street Journal, plans to launch its first mutual fund next year, based on a securities filing it made this week.
New York-based Arden has billed the mutual fund as a way for affluent individual investors to access hedge-fund managers without the high fees and longer lock-ups they would often encounter as direct clients of those funds, according to the newspaper. The Arden fund will draw money from certain clients of the Fidelity Portfolio Advisory Service, which requires a $50,000 minimum.
Strategic Advisors Inc. is part of Fidelity’s $400 billion global asset allocation division and portfolio advisory service, Loprochio says. Fidelity’s Portfolio Advisory Service is a mutual fund advisory program in the managed accounts industry that has $98.3 billion in assets under management as of Sept. 30, says Vincent Loporchio, head of corporate media relations for Fidelity Investments.
More recently, Fidelity began allocating the assets within its Portfolio Advisory Service to the Arden alternative strategies fund, Loporchio says.
“With the alternative strategies such as that managed by Arden, it is our goal to provide investors additional opportunities to improve risk and return as well as to potentially improve portfolio resilience in down markets and exposure to strategies that are less correlated with stocks and bonds that offer a lower volatility,” Loporchio says.