Columbus, Ohio-based Beacon Hill Fund Services announced their first customer for its new Advisors Investment Trust product. The product enables multiple unaffiliated registered investment advisors to co-exist in the same registered investment company.

Customer number one is Franchise Equity Fund, run by London-based Independent Franchise Partners, an independent investment management firm with more than $6 billion in AUM.

“They are a perfect client for us,” said Scott Englehart, president of 4-year-old Beacon Hill. “They are really good guys, smart guys. They came out of Morgan Stanley and have a long record with a focused equity fund.” Prior to starting their own company, the founders of Franchise Partners managed the franchise equity strategies group at Morgan Stanley. In that capacity, they invested in so-called franchise companies, such as Proctor & Gamble and Apple, which dominate their markets, Englehart said.

Beacon Hill expects to attract three or four other large clients this year to its new trust product, as more and more institutional advisors move money from hedge funds, SMAs and limited partnerships into mutual funds for the higher transparency, increased regulatory oversight and better reporting.

Beacon Hill serves as the CCO, CFO and distributor to advisors who offer their own mutual funds, shouldering many of the complex, time-consuming tasks that make it prohibitive for advisors to operate in this space on their own. Advisors Investment Trust, with a minimum investment of $3 million, is structured as a series trust or umbrella trust. As such, it enables unaffiliated RIAs to independently manage, distribute and brand their respective mutual fund portfolios within the same legal entity, creating efficiencies and cost savings for the members.

While Beacon Hill will act as the sponsor and distributor, CCO and CFO, and hold other fund positions, Northern Trust is providing fund accounting, financial administration, custody and transfer agency and shareholder services to the trust.

“It was important to our firm to enter the U.S. mutual fund business with partners that provided a cost effective vehicle and a turn-key solution that minimizes administrative requirements, enabling IFP to focus on managing our clients’ portfolios,” John Kelly-Jones, chief operating officer and partner of IFP, said in a statement.

“With Madoff and all the other transgressions out there (advisors) are looking for a vehicle with more transparency which a mutual fund does provide,” Englehart said. “You really have to try to cheat in the mutual fund world. It’s so structured…. There’s nothing wrong with an SMA or a hedge fund. It’s just there’s demand for better transparency and better reporting.”

Englehart says that Beacon has identified about 60 institutional managers – in the U.S. and abroad – that fit the client profile Beacon Hill is looking for. They have sent out proposals to about ten so far.

Ann Marsh writes for Financial Planning.