The new fund gives individuals “diversified alternative types of investments” once available only through limited partnerships, Sam Fraundorf, president of Wilmington Trust Investment Advisors, said in an interview. The lower breakpoint makes the investment solutions it provides “available to a much wider percentage of clients,” he said.
“It looks like a hedge fund,” he said to describe the new Wilmington Rock Maple Alternatives Fund, which provides exposure to a diverse set of alternative strategies, including long-short equity strategies and strategies driven by mergers and other corporate actions, he explained.
The fund is currently available to clients of Wilmington Trust through its bank advisors, but its distribution will expand to other banks and direct platforms, such as Fidelity and Charles Schwab, said John Kelley, president of Wilmington Trust Funds.
The new fund comes as financial advisors increasingly seek alternative investments to diversity their clients’ portfolios and temper market volatility. In a recent study, PENSCO found that eight in 10 advisors expressed interest in investing in alternative assets. And Curian Capital found that more than half of the 1,000 financial advisors it surveyed have begun using more alternative investing strategies, with 60% planning to increase their use over the next year.
The fund is also available to institutional investors through its Class I shares, Kelley said. The minimum investment for institutional clients is $1 million.
The fund is managed by a team of professionals with expertise in “selecting and blending investment strategies with complementary styles, risk exposures and opportunities,” and aims to “deliver long-term growth of capital through consistent returns with a low correlation to traditional asset classes,” the company said in a statement.
The fund is managed by Wilmington Funds Management Corp., a Wilmington Trust company, in partnership with Wilmington Trust Investment Advisors Inc., and Rock Maple Services, LLC, an investment advisor specializing in alternative investments.
The fund’s portfolio managers selected eight independent sub-advisors, which will oversee separate sub-portfolios of the fund in accordance with specific parameters, constraints and risk-return objectives, according to the company statement. The fund also has assets invested in two independently managed mutual funds, it said.
Wilmington Trust provides wealth advisory services for high-net-worth clients throughout the U.S. and Europe and corporate client services for institutional clients throughout the world. It is a wholly owned division of M&T Bank.