Boutique alternative investment specialist Hatteras Funds has launched a daily liquid alternative to private equity, the Hatteras PE Intelligence Fund (HPEIX).
The Hatteras PE Intelligence Fund is a daily liquid alternative to private equity.
The fund is designed to provide access to returns that are similar to those that may be achieved through a global, broad-based investment in private equity buyout funds on a committed capital basis. It is a turnkey solution for potential return enhancement based on proprietary buyout deal intelligence.
Through an exclusive relationship, the fund benefits from daily deal intelligence provided by Preqin, an alternative investment data provider.
The fund seeks comparable returns to the Nomura QES Modelled Private Equity Returns Index (PERI), developed in collaboration with quantitative think tank Quantitative Equity Strategies (QES) and Nomura, an Asian investment bank.
PERI was developed on a foundation of private equity research that suggests that a substantial portion of private equity buyout returns can be attained through investments in public market sectors. The fund does not invest directly in buyout funds or the public equity of buyout firms. PERI allocates to both publicly available stocks and global currencies based off of the sector, market cap, currency and timing of the real-time deal activity. In addition, the index targets both the returns of capital invested in private equity buyout funds as well as a risk-free rate of return for the proportion of capital that has been committed but is not yet funded.
Robert L Worthington, president of Hatteras Funds, says: “We are very pleased to offer this new fund, which is unique in the marketplace. In the past, private equity has been inaccessible to many investors. This product is the first US product to offer investors the opportunity to benefit from the potential return enhancement qualities of private equity through a daily liquid alternative mutual fund. It demonstrates Hatteras’s commitment to designing and delivering alternative investment solutions to our clients.”
Michael J Hutten, president of distribution, says: “Private equity has consistently delivered a return premium versus other asset classes. However, long lock-up periods, a lack of transparency and large minimum investments have been challenges for many investors. The PE Intelligence Fund targets private equity-type returns, but in a transparent, liquid, cost-efficient, and easy to use structure.”
