20/07/2011 Author: Elana Margulies

Philadelphia hedge fund turns mutual

Philadelphia Investment Partners, a New Jersey-based financial advisory firm, has transitioned its global all-cap long/short hedge fund into an Investment Company Act of 1940 mutual fund.

The firm’s New Generation Fund will continue to implement the same strategy, using an options overlay that will help it bypass some of the shorting restrictions built into the ‘40 Act’, a US law designed to protect retail investors.

Compliance with the 40 Act will enable Philadelphia to widen its client base. “We realised there wasn’t really a product vehicle that was feasible for the majority of our clients,” said Joe Duncan, one of the fund’s portfolio managers.

The move comes as lines between traditional and alternative investments continue to blur, with a number of firms converting hedge funds into mutual funds, or hedge fund managers adding mutual funds to their portfolio.

Peter Zeuli is the head portfolio manager of the fund, which initially launched in January 2007, has $15m under management and an ultimate capacity of $1bn.