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  • Seller
  • Buyer
  • Type
  • Date Announced
  • Seller AUM
  • AIP Mutual Funds
  • Hatteras Funds
  • Mutual Fund
  • July 9, 2009
  • $300 Million

Seller Details

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 and Beta Hedged Strategies Fund, 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.

Buyer Details

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.

Transaction Summary

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.

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 and the Beta Hedged Strategies Fund -- 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.

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