News
July 09, 2009
Raleigh, North Carolina (July 9, 2009) - Hatteras Funds, a leading provider of distinct alternative investment solutions for financial professionals, announced today that it has entered into a definitive agreement to acquire a controlling interest in Alternative Investment Partners, LLC, a Harrison, NY-based provider of open end mutual funds of hedge fund strategies known as AIP Mutual Funds.
David B. Perkins, CEO and founder of Hatteras Funds, will become Chief Executive Officer of the company, which will be rebranded under the Hatteras umbrella and operate as the mutual fund division within Hatteras Funds upon investor approval of the transaction. Lee Schultheis, Chief Executive Officer and Chief Investment Strategist of AIP Mutual Funds, will remain with the company as President of this division. Mr. Schultheis, along with Asset Alliance Corporation, an original investor in the Company, will continue as significant shareholders. Terms of the proposed transaction were not disclosed. The transaction is subject to AIP Funds investor approval, regulatory filings and other customary closing conditions. Consummation of the agreement is expected to be completed in August 2009.
The acquisition will increase Hatteras Funds and its affiliated companies' assets under management to approximately $1.6 billion and will add two mutual funds of hedge fund strategies -- the Alpha Hedged Strategies Fund (TICKER SYMBOL: ALPHX) and the Beta Hedged Strategies Fund (TICKER SYMBOL: BETAX) -- to its family of distinct alternative investment solutions designed for financial professionals and their clients. ALPHX and BETAX provide financial professionals with access to alternatives that have all the client-friendly features of a mutual fund, including daily liquidity, no lock-ups, no accreditation requirement, no performance fees, and 1099-tax reporting.
"AIP Mutual Funds is an ideal fit. The products are a natural extension of our current offerings and allow us to bring financial professionals a needed option for their clients' portfolio diversification: an alternative investment solution through a mutual fund with daily liquidity," said David B. Perkins, Chief Executive Officer of Hatteras Funds. "AIP Mutual Funds had a stroke of genius when it created the structure of these funds, which allow a wider range of individuals to access alternatives. In a post-Madoff world, these mutual funds of hedge fund strategies are a tool for financial advisors to allocate to alternatives while meeting increasing client demands for liquidity and transparency."
"The benefits of partnering with Hatteras to the AIP Mutual Funds' investors will be significant. Hatteras brings expertise in alternative investment management, administrative, client service and operational excellence to our investors that will enhance the investment process and has the potential to deliver value for years to come," said Lee Schultheis, CEO of AIP Mutual Funds. "The synergy of Hatteras and AIP should maximize the potential of the Funds."
Hatteras Funds will look to add value to every step in the investment management process of the AIP Mutual Funds, including investment policy, asset allocation and risk management. As with all Hatteras Funds, the goal is to institutionalize a highly disciplined investment process that realizes the most value for fund investors.
About AIP Mutual Funds
Founded in 2002, AIP Mutual Funds is a provider of open-end mutual funds of hedge fund strategies. Its two funds, Alpha Hedged Strategies Fund (TICKER SYMBOL: ALPHX) and Beta Hedged Strategies Fund (TICKER SYMBOL: BETAX), employ a multi-manager approach to a variety of hedged alternative investment strategies. Each strategy is managed in a liquid portfolio of its own securities, using the limited amounts of leverage and short-selling allowable in open-end mutual funds.
The Funds utilize the talents of highly specialized hedge fund managers as sub-advisors in executing their alternative investment strategies. With features inherent in mutual funds - daily liquidity, access and no investor qualification - they allow a wider range of investors to access the portfolio diversification benefits of hedge funds, and still have those investments be liquid. The Funds provide broad exposure to a variety of active management hedged strategies.
AIP Mutual Funds managed approximately $300 million in assets as of June 15, 2009.
About Hatteras Funds
Hatteras strives to be a world-class provider of unique alternative investment solutions for financial professionals. Hatteras and its affiliated entities were founded in 2003 to give investors the ability to access institutional-quality alternative investments with confidence. Hatteras partners with alternative investment teams whose unique skill, experience and investment focus enable us to design, structure and deliver investment products that solve specific portfolio needs. We empower investors by delivering the strategies, managers, process discipline and quality that are typically only available to portfolios with more than $1 billion in assets.
Hatteras Funds and its affiliated companies had $1.3 billion in assets under management as of May 31, 2009.
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