Chicago-based Keeley Asset Management Corp. has launched the KEELEY Alternative Value Fund in two share classes. The new fund will be managed with an alternative strategy that combines Keeley research with active risk management by the fund’s subadvisor, Broadmark Asset Management, the firm said in a statement.
The fund’s investment objective is to achieve long-term capital appreciation and to protect capital in adverse market environments, the statement said. For the equity investments, the fund will invest in small and midsize companies, currently defined as $7.5 billion and less. Keeley will focus mainly on individual stocks undergoing corporate restructuring.
For its part, Broadmark will assess overall stock market risk by monitoring factors such as monetary policy, valuation analysis, investor sentiment and momentum. When it perceives the fund’s equity market risk as high and its opportunity low, the subadvisor will reduce its net exposure to equities by selling futures and option combos, among other things. It may also engage in short selling of individual securities or ETFs and ETNs or go long inverse ETFs. Broadmark can hedge up to 100% of the fund’s long equity exposure, the statement said.
The fund’s Class A share has an annual operating expense ratio capped at 1.89% until April 1, 2011, and includes a 0.25% annual 12b-1 fee and a 1.60% investment advisor fee on the balance of average daily net assets. The minimum investment is $2,500. The Class I share’s annual operating expense ratio is capped at 1.64% until next April, and includes the same 1.60% investment advisor fee. Minimum investment is $1 million.
Michael S. Fischer ([email protected]) is a New York-based financial writer and editor and a frequent contributor to Wealth Manager.