Although American Century launched its initial alternative mutual fund more than a decade ago, the firm is best known for its traditional strategies involving stocks, bonds, and cash. But American Century has been making more of a push into liquid alts, with the hiring of Cleo Chang as Head of Alternative Investments, and the recent launch of the AC Alternatives Income Fund (ALNNX).
The new fund is the first of several to be launched as part of American Century’s new AC Alternatives brand, and the firm’s other alternative products have been re-branded as part of the AC Alternatives line, as well.
AC Alternatives Income
The newly launched AC Alternatives Income Fund is managed by Perella Weinberg Partners Capital Management, a leading global institutional asset manager with over $9 billion in assets under management. The firm’s sub-advisory team is headed by Chris Bittman, chief investment officer of Perella Weinberg’s outsourced CIO service unit Agility, and rounded out by his Agility colleagues Kent Muckel and Darren Myers.
“We’re excited to be collaborating with Perella Weinberg to bring our clients a range of alternative investment solutions,” said Ms. Chang, in a recent statement. “Perella Weinberg’s experience managing both traditional and non-traditional asset classes serves as a nice complement to American Century’s own expertise as a multi-boutique, risk-aware, institutional-quality asset manager.”
“For the new AC Alternatives Income Fund, we’ve assembled a team of portfolio managers and subadvisors with deep experience investing across a range of asset classes under varying market conditions,” said Mr. Bittman. “Like American Century, our asset management business is predicated upon the principle that, over time, a client’s success ultimately translates into the success of the firm.”
Mr. Bittman and the rest of the Perella Weinberg sub-advisory team seek to provide the fund’s shareholders with “diverse sources of income” by using a “flexible and opportunistic investment strategy” that allocates assets among various underlying subadvisors, each pursuing different investment strategies. Currently, the fund’s sub-sub-advisors include Arrowpoint Asset Management, Sankaty Advisors, Third Avenue Management, and Good Hill Partners. American Century Investments provides additional oversight.
In addition to the re-branding of American Century’s two previously existing alternative funds with the AC Alternatives moniker – the AC Alternatives Equity Market Neutral Fund (ALHIX) and the AC Alternatives Market Neutral Value Fund (ACVVX) – American Century has also launched ACAlternatives.com as an alts-education website.
A section at the site titled “What are Alternatives?” lists 6 reasons to own alts, the evolution of alts, types of liquid alts, and liquid alts versus private structures; another section on “Using Liquid Alternatives” provides links to pages on allocating, special goals, and risks.
ACAlternatives.com is optimized for tablet users and also features insights from investment professionals, videos, and “other tools designed to help investors make informed decisions when considering alternative investments.”
AC’s Other Alts
The fund now known as the AC Alternatives Equity Market Neutral Fund was originally launched back in 2005. For the three years ending July 31, the fund’s 2.23% returns ranked in the top one-third of funds in its category, earning it a four-star rating from Morningstar. American Century’s Market Neutral Value Fund was launched in 2011. Its three-year returns of 3.00% through July 31 ranked in the top 22% of funds in its category, earning a matching four-star rating.
The AC Alternatives Income Fund, which launched on July 31, is just the first of three Perella Weinberg-advised funds American Century plans to launch this year. The others will include the AC Alternatives Equity and AC Alternatives Multi-Strategy funds. The former will combine several equity-oriented strategies in pursuit of attractive returns with low correlation to the stock market; while the latter will employ several sub-strategies, including long-only equity, long/short equity, and event-driven, in pursuit of the attractive returns with low correlation to the stock and bond markets.
For more information, visit ACAlternatives.com