When Fidelity Investments ripped $2 billion from a pair of alternative mutual funds earlier this year, some observers thought it might mean the investment giant was getting out of the alternatives market. As it turns out, that wasn’t quite the case, at least for Fidelity’s advisor platform. In fact, Fidelity is expanding its focus on its alternatives offerings, as indicated by the recent expansion of its private equity platform for financial intermediaries.
“Delivering increased access to private equity has been a priority since we launched our alternative investments platform more than two years ago,” said Mark Haggerty, head of product for Fidelity Institutional, in a recent statement. “Advisors have been looking for an effective way to leverage this type of investment strategy. By working with some of the major providers in the private equity space, we believe our offering gives advisors who are interested in private equity the tools to efficiently evaluate and incorporate these investments into their clients’ portfolios.”
The platform, which was originally launched in October 2013, now benefits from Fidelity’s strategic alliances with iCapital, CAIS, and Goldman Sachs Asset Management (“GSAM”). The three firms work with Fidelity to provide financial advisors and family offices with access to, and research and education about, private alternative investment products.
- The iCapital Network provides curated selection of single-manager, multi-manager, and vintage-year private equity investments with $100,000 minimums.
- CAIS’s product platform provides access to a growing menu of hedge funds and private equity funds at lower minimum investments, as well as electronic subscriptions, integrating reporting, and portfolio construction and reporting tools.
- GSAM provides access to portfolios of external private equity managers.
The two alternative mutual funds from which Fidelity pulled its investments were the Blackstone Alternative Multi-Manager Fund (MUTF:BXMMX) and the Arden Alternative Strategies Fund (MUTF:ARDNX). Both funds liquidated as a result of Fidelity’s decision, but each had a “sister fund” still in operation, as reported by Bloomberg.
Jason Seagraves contributed to this article.