It seems like everyone is talking about liquid alternatives. If you read the news or listen to industry pundits, you can't help but hear about their momentum, and many mutual fund sponsors are looking to capitalize on the opportunity. While not everyone agrees on how big the market will be, there is a general consensus that liquid alts are one of the fastest growing asset classes in the industry. A recent survey from Barclays showed that liquid alts grew at a significantly faster pace than hedge funds last year, and Barclays and Citi both project assets in the space will reach nearly $1 trillion by 2018.

With more retail investors and retirement plans looking for the diversification benefits of alternative strategies with the safeguards of a '40 act structure, there doesn't seem to be any slowdown in sight. And while the demand is strong and seemingly only getting stronger, mutual fund sponsors who think they can simply launch a fund and expect investors to come with assets in tow could be in for a rude awakening. Being in the space and being successful in the space are two different things all together.

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