Hatteras Funds manages $2.1 billion in the alternative investment space. One of its products is mutual fund of hedge funds. FINalternatives posted a recent interview with the President of Hatteras Funds, Bob Worthington. Their funds invests in five strategies: long/short equity, equity market neutral, relative value long/short debt, event driven and managed futures. The hedge funds have between $25 to $500 million in assets under management. The mutual fund is diversified with 23 managers in a portfolio of $550 million. Hatteras thinks that they can manage $5 billion in assets with 35 managers. The managers have to meet compliance/risk control standards as well as being a good fit in the overall portfolio.
The mutual fund has daily liquidity. This allows great flexibility in determining a tactical asset allocation. Hatteras usually does not make adjustments on a daily or weekly basis but they can adjust if market conditions change dramatically. The fund increases liquidity and transparency when compared to more illiquid fund of fund or hedge fund vehicles but has less risks and returns. However, the fund gives the investor access to hedge fund strategies.
The article can be accessed here.
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