With its new product, Gottex is joining a growing list of fund firms now tapping into investors' demands for portfolios that are less correlated to broader markets. Until recently, hedge funds and private equity and real estate were off-limits to retail investors because they were deemed too risky and expensive, often requiring a $5 million minimum investment.
Researchers at Goldman Sachs counted roughly 400 so-called liquid alternatives funds, including offerings from Blackstone Group and Arden Asset Management which are both being distributed through Fidelity Investments, and said roughly one-third of them were launched within the last two years.
For funds-of-funds now facing a decline in high-end business because institutional investors such as pension funds prefer to make direct hedge fund investments, funds for retail customers may prove lucrative.
Investors are expected to warm to these types of funds quickly, sending as much as $2 trillion into them over the next five to 10 years, Goldman forecast in a recent research report.