Leveraging the success of its nearly 2 1/2 year old 361 Managed Futures Strategy Fund, 361 Capital has announced that it will be extending its current lineup of three alternative mutual funds to include additional single manager funds sub-advised by both internal and external managers. Founded in 2001, 361 Capital has been focused since its inception on delivering alternative strategies to investors in liquid investment vehicles. Over past several years, the firm has refined its focus on delivering their strategies to financial advisors through mutual funds, a vehicle now preferred by many advisors due to its liquidity and lower cost structure relative to often used private limited partnership structures.
Going Beyond Managed Futures
In less than 3 years, 361 Capital has grown its 361 Managed Futures Strategy Fund to more than $630 million. That fund, which has a sole focus on trading U.S. equity futures, uses a counter-trend trading approach that has worked well in the markets over the past two years when most other managed futures funds have struggled. As an extension of that product, and based upon investor demand and feedback for a more broadly based counter-trend strategy, 361 Capital launched a global version of the fund earlier this year that diversifies its trades across North American, European and Asian equity markets.
With its focus on continuing to extend its product lineup, 361 Capital will be looking to bring a global macro offering to market by July 1, and that fund will be managed by Blaine Rollins, a managing director and senior portfolio manager at 361 Capital. Prior to joining 361 Capital, Rollins was a portfolio manager on a number of Janus funds including the Janus Fund, the Janus Triton Fund and the Janus Balanced Fund. According to a recent release from the company, the global macro fund will have a broad scope for investment across global equity, fixed income, commodity and currency markets. Global macro funds typically take a top down view of investing on a global basis and look for major themes to exploit.
Single Manager Focus
Many mutual funds firms who use sub-advisors for the management of their single-strategy mutual funds, such as Altegris and Hatteras, use a multi-manager structure. This allows for diversification across multiple managers within a single fund and generally reduces the overall volatility of a fund. 361 Capital is taking the view that as financial advisors become more savvy about alternative funds, they will want to assemble the pieces themselves. As such, they plan to provide advisors and other intermediaries with additional single manager, single strategy mutual funds that will be managed by hedge fund managers who seek to make their strategies available to the retail market.
“With the growth of liquid alternatives that is expected over the next five years, particularly among hedge funds looking to enter the ’40 Act space, we believe there is an opportunity to expand our fund offerings,” said Tom Florence, CEO of 361 Capital. A recent report from Barclays Prime Services notes that the liquid alternatives market grew by 43% in 2013, well outpacing the 15% growth rate of hedge funds. Those growth numbers will quickly get the attention of many high quality hedge fund managers looking to diversify their client base, and wanting to build a larger brand within the investment community.
“We believe we can help great money managers diversify their product offerings and distribution channels, while developing innovative liquid products built for today’s alternative investments environment,” added Florence. How 361 Capital goes about doing this will become more apparent over time, but taking a different approach than some of their competitors has paid off for the firm so far.