ConvergEx Group has launched a new division dedicated to the formation, performance and management of alternative mutual funds.

The new Alternative Mutual Fund Services division will be run by its NorthPoint prime services business and will work with traditional mutual funds and hedge funds that are interested in launching alternative mutual funds.

Such funds are run with investment policies other than the buy-and-hold approach of mainstream mutual funds. Typically, they emphasize active trading of individual stocks and timing of market turns. They are still priced each day, at the close of trading.

“Today, alternative mutual funds represent less than 1% of the $12 trillion mutual fund market. Since we began offering select services to launch alternative mutual funds back in May, we have seen a significant uptick in demand. We believe that trend will continue and our expectation is that alternative mutual funds will reach over 5% of the market within the next 10 years,” said Doug Nelson, chief executive officer of ConvergEx’s NorthPoint business.

Jay Jacobs, a partner at Merlin Securities, has been hired to head this new division.

Jacobs “has first]hand experience in every aspect of managing and operating alternative mutual funds, from creating a fund to fund distribution – all of which can be tremendously helpful in helping funds raise assets,’’ said Nelson.

NorthPoint uses technology to provide prime services such as custody, execution, analytics and reporting. The business also provides capital introduction, research, commission management and startup services.

-- This article first appeared on Money Management Executive.



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