Hedge fund manager launches retail fund

Hedge fund manager Palos Management has announced it is entering the mass market retail investment space, creating a mutual fund.

“We were being asked by investment advisors to create a mutual fund for retail investors that pays out quarterly distributions and is RRSP eligible, so that their clients could have access to our unique strategies,” said Charles Marleau, president and senior portfolio manager of Palos Management.

The Palos Equity Income Fund is mainly invested in Canadian income-paying securities, with the manager having the flexibility to able to take short positions and employ merger arbitrage or pair trading strategies.

Short positions are limited to no more than 20% of the overall portfolio, and the managers employ no leverage. The short positions are 150% covered by cash. The active portfolio is limited to North American equities.

The fund’s inception date is February 18, 2011, but it was actually launched as an exempt non-prospectus private mutual fund January 3, 2008. Since then, it has accumulated $11.5 million in assets under management.

It’s still too early for the fund to have calculated its MER, but the management fee has been set at 1.5%, with a 0.75% trailer.

With the goal of making hedge fund strategies accessible to all, the fund has a minimum initial investment of $1,000, with $500 minimum subsequent investments.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.