Houston-based Salient Partners earlier this month added the Pure Trend Fund, a managed futures offering, to its growing list of alternative mutual funds. The firm currently manages the Salient Risk Parity Fund and the Salient MLP & Energy Infrastructure Fund II.
Lee Partridge, chief investment officer at Salient Partners, told Money Management Executive that the fund is based on a trend-following algorithm and bets on 45 futures markets spread across equities, interest rate and commodities. ‘The goal is to offer a liquid alternative fund to retail and institutional investors that isn’t based on a 2/20 structure and has quite a bit of transparency and is fully liquid,” he said.
Partirdge added that investors need not fear the fund’s black-box approach because “The attractive aspect of trend-following tends to be negatively correlated with equities and credit during periods of financial distress such as 2008, 2001 and 1998. These were episodes where trend-following made a lot of money when people’s core portfolios were in the ditch. These are strategies that tend to do well when markets are diverging significantly when you get a big breakout either on the upside or downside.”
The fund charges a management fee of 95 basis points and its expense ratio is capped at 130 bps.
Partridge added that the firm is bullish on the alternative mutual fund space and is looking into multi-strategy products for a later launch date. He also said that the firm is currently recruiting a head of institutional sales to focus on pensions, foundations and consultants. David Linton joined the firm last February as Managing Director, responsible for leading retail sales and distribution activities.