Fidelity Partners With Morningstar, Goldman, CAIS to Bring Alts to Advisors

New platform will offer research, third-party due diligence and reduced fees on certain products

Fidelity Institutional announced Monday that it is leveraging relationships with Morningstar, Goldman Sachs and CAIS to bring a platform of alternative investments to advisors.

The new platform will provide access to products like hedge funds, private equity funds and ’40 Act mutual funds. It will also provide a list of alternative investment funds from third-party sponsors with reduced custody fees.

Through its relationship with Morningstar, Fidelity will provide advisors with research and education on alternative products. The education center will offer analyst insights on how to incorporate alternatives in a client’s portfolio and when is the best time to do so. Market research and trends are also available, as is a list of alternative mutual funds, generated by Morningstar Associates.

Goldman Sachs and CAIS will help offer products and due diligence. CAIS will provide access to hedge funds with reduced minimums, portfolio construction tools and an automated electronic subscription process. Due diligence and monitoring will be provided by Mercer.

Goldman Sachs will also offer access to hedge funds through portfolios of external hedge fund and private equity managers utilizing various alternatives strategies. It will also offer thought leadership on the platform. 

Last year, CAIS launched what it calls the first global alternatives exchange, known as CAIS-X, which provides advisors with a platform for conducting due diligence, analysis and trading of alternative investments. The idea is that it will bring private vehicles into the public (advisor) space. With greater interest among advisors of alternatives in recent years, the value is readily apparent; something to which their 10% monthly growth can attest.

 

Earlier this year, CAIS announced the launch of its capital markets product offering, which includes access to IPO and follow-on offerings as well as structured products. Fidelity and CAIS will introduce the strategic alliance with a nationwide road show and CAIS will also sponsor Fidelity's upcoming 2014 Alternative Investment Forums.

“CAIS is very pleased to be selected as the hedge fund and private equity gateway to Fidelity's network of wealth management firms,” Matthew Brown, co-founder and CEO of CAIS, said in a statement. “CAIS will provide wealth management professionals the needed solution to meet client demand.”

“This platform was built on insights from our clients regarding the challenges they face incorporating alternative investments into their clients’ portfolios,” Mark Haggerty, head of Fidelity Institutional’s product group, said in a statement. “Delivering access to leading products was a priority, but we also invested in providing institutional-quality third-party due diligence, insights and education and a simplified and consistent pricing structure.”

As part of the education provided, Fidelity plans to conduct a series of alternative investment forums to keep advisors up to date on changes in the industry.

Fidelity will continue to offer aggregated reporting, custody, trading, clearing and execution services to advisors who use the platform, which will integrate with the WealthCentral and Streetscape platforms.

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Read more about CAIS’ alternatives platform in the December 2012 issue of Investment Advisor.

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