For the past four years this column has chronicled the ongoing adoption of alternative investment strategies by the financial advisor community. As a manufacturer, manager, and distributor of these products I have often been challenged by the notion that although hedge funds have historically (and continue to be) the domain of the high-net-worth and ultra-HNW investor, the investment advisors that aspire to counsel this same prize investor demographic have been slow to embrace these strategies in their own practices and portfolios.
Advisors often explain their slow adoption rate (relative to HNW investors) of alternative investments as being a due diligence and access issue; they lack the means and resources to determine which managers are truly delivering alpha, and often cannot obtain client access to the most desirable managers of hedge funds and other alternative strategies.
A new initiative by a pair of accomplished hedge fund industry veterans seeks to resolve advisors’ issues.
The former founders of the UBS Alternative Investment Group–Greg Brousseau and Mitchell Tanzman–have established a new firm, Central Park Group, dedicated to providing alternative investments to the independent advisor market. Manhattan-based CPG is backed by Bear Stearns Asset Management and AIG Global Investment Group.
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At UBS, the CPG founders managed an $8 billion alternative investment platform that included hedge funds, funds-of-funds, private equity, and real estate. The group developed products managed by many of the biggest alternative investment firms. These managers generally have large minimums suited for institutional investors. Central Park Group will create structures that can provide access to sought-after pedigreed alternative managers at the $100,000 to $1 million level.