HedgeWorld Markets has officially opened its hedge funds marketplace, HedgeFund Select, to U.S.-based accredited investors, qualified institutions, and investment advisors.
Qualified advisors can now research, invest in, and monitor single- and multimanager hedge funds via HedgeWorld's password- protected, transaction-free online marketplace. More than 3,000 investors--including institutions, funds of funds, and advisors--have applied for membership, and more than 100 hedge funds have been selected to distribute their funds on the platform. The HedgeWorld marketplace was initially only available to HedgeWorld's 32,000 members, but "we are now accepting applications from non-HedgeWorld members," says Jeff Joseph, managing director of HedgeWorld (www.hedgeworld.com), which describes itself as a global provider of hedge fund information and investment products.
The marketplace "is comparable to the best mutual fund distribution platforms or supermarkets," says Joseph, who also writes a monthly column on hedge fund performance for Investment Advisor. But not all accredited investors who sign up will gain access to the marketplace. "Approval is not automatic," he says. Potential participants, he says, must pass a set of regulatory requirements, and RIAs and financial planners must complete a "pretty thorough" online application with details about their businesses and "how and where [the advisor] allocates assets." Those advisors "who are experienced with hedge funds" are the most likely ones to be approved.
Joseph says HedgeWorld will be adding new hedge funds to the platform every two weeks. "We'll continue to go very wide in terms of representing every possible [hedge fund] strategy," he says. Right now, 30 of the 100 hedge funds with distribution agreements have been released on the platform. The remaining 70 funds must undergo due diligence before being released. Joseph says there are three primary "subcategories" of hedge fund products on the platform: funds of funds, which are of particular interest to advisors; single-manager hedge funds from established managers with large asset bases and long track records; and a "seedling" marketplace of new or emerging managers. "There's a platform of new product, too, which is of particular interest to family offices and funds of funds that are looking for the next rising star manager," he says.