William Blair’s new Directional Multialternative Fund is a multi-manager, multi-strategy fund designed to provide exposure to long/short equity, event-driven, and macro strategies. The fund debuted on November 7 with over $100 million in assets under management, and it is available in two share classes: N (WDMNX) and I (WDMIX).
The objective of William Blair’s new fund is capital appreciation with dampened volatility and limited correlation to the broader markets. The fund is managed by the six members of the William Blair Hedge Fund Strategies Investment Committee, who allocate the fund’s assets to one of several sub-advisors, each pursuing different alternative strategies. An overview of the fund says the managers will typically allocate between 50% to 75% of its assets to long/short equity strategies; 0-50% to event-driven strategies; and 0-25% to macro strategies.
Why should investors consider William Blair’s new fund? For one, it offers exposure to multiple alternative strategies in a liquid format, but that can be said for lots of new funds. What makes the Directional Multialternative Fund unique is its stated target of 6% to 8% long-term total returns, with 8% to 10% expected long-term volatility; and William Blair’s due-diligence and manager-selection processes.
“We have identified 10 criteria that we believe a successful manager must possess,” says the new fund’s literature. Those criteria include:
- Validity of strategy
- Quality of process
- Risk profile
- Risk management
- Historical performance
- Depth of professional resources
- Organizational depth and stability
- Asset capacity
- Client service
- Vehicle quality
After the William Blair Hedge Fund Strategies Investment Committee determines an investment need, potential sub-advisors are screened according to criteria listed above, and then they are put through a rigorous due-diligence process that refines the list of potential managers to three or four names, who are then visited onsite and subjected to background checks and additional research. William Blair’s Hedge Fund Strategies team has more than 13 years of experience in researching alternative managers and building multi-manager alternative portfolios, and this is a service they provide to investors in their new multialternative fund.
N-class shares of the William Blair Directional Multialternative Fund (WDMNX) require a $2,500 minimum investment and are assessed a 2.05% expense ratio. I-class shares (WDMIX) require a $500,000 minimum investment and have a 1.80% expense ratio.
For more information, download a pdf copy of the Fund Overview.