News

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The rise of '40 Act futures funds

The financial crisis of 2008 bought a renewed interest in the benefits of managed futures.

And the demand for alternative strategies offering returns uncorrelated to equity markets has helped swell managed futures mutual fund assets under management (AuM) from just over $200bn to $330bn in the following years.

The mutual fund industry has seized on the opportunity to make the strategy available to a broader array of smaller investors wrapped in a 1940 Act package.

Since the first managed futures mutual fund, the Rydex/SGI, was launched in March 2007, the space has grown to $9bn AuM, according to Morningstar data, while alternative mutual funds as a whole topped $100bn AuM last year.

Meanwhile assets in European Ucits wrapped CTA funds peaked at roughly $7.5bn last year, according to data from Geneva-based Alix Capital, which tracks the space.

In the US, there are now more than 40 managed futures mutual funds on the market. Typical minimum investments are $2,500. Some are even lower.

But more recently growth has stalled. Monthly inflows peaked in October 2011 at $619m, and questions linger over their benefits and performance.

The prospects for the space appear to have reached a juncture.

To date, the funds have been rapidly rolled out through registered investment advisors (RIAs) and broker dealer channels, both wire house and independent, as well as institutional channels. 

To continue reading this article, which features Gemini CEO Andrew Rogers and several of Gemini's clients, vist the CTA Intelligence site by clicking here.

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Smaller Shops Leap Over Lower Barriers to ETF Market

The time, cost and complexity involved in launching an ETF are shrinking and several smaller managers are finding the environment ripe for entry.

Ten fund firms have filed for exemptive relief to launch exchange-traded funds since December, when SEC Division of Investment Management chief Norm Champ announced the end of a moratorium on new active ETF applications that include derivatives use.

Indeed, while large managers like Fidelity and Eaton Vance are among those firms starting the regulatory process to launch ETFs, about half of those applications have come from smaller fund firms and start-up asset managers looking to make a play in the ETF space. They include boutique fund shops like Transparent Value and Guinness Atkinson as well as new ventures such as Artivest and ERNY Financial.

“It feels like the barriers to entry are coming down,” says Noah Hamman, CEO of AdvisorShares, an ETF sponsor that works with registered investment advisors and boutique money managers to bring their strategies into an active ETF format.

Those barriers have traditionally been regulatory and operational, from establishing a trust and getting exemptive relief to developing relationships with service providers and the trading community. Yet a seemingly speedier exemptive relief process and the development of service providers catering to small and start-up managers are making it easier for firms to test the market.

“At least in the active space, the value proposition is growing. People see that the exemptive application process may not be as long and drawn out, which can be helpful from a business planning and a legal cost perspective, and on the '40 Act side, there's more flexibility on the active strategies that a manager can pursue,” says Michael Mundt, a partner at Stradley Ronon. Mundt says he has seen an uptick in interest among firms looking to file for exemptive relief.

If a firm does not want to get its own relief, it can now build a product in one of the growing number of ETF series trusts administered by Exchange Traded Concepts, Gemini Fund Services and Atlantic Fund Services. Those firms often offer compliance, legal and distribution support services along with the trust.

To read the entire article, log into Ignites by clicking here.

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Gemini makes Hauppauge move

Gemini was featured in Long Island Business News: Gemini Fund Services has moved its more than 100 workers into a new, 35,000-square-foot Hauppauge office and is continuing to hire.

CEO Andrew Rogers said his firm remains at “the forefront of enabling small- and mid-sized funds to navigate an evolving regulatory environment.”

The company moved from an 11,000-square-foot space at 450 Wireless Blvd. to its new space at 80 Arkay Drive.

Originally American Data Services Inc., Gemini is a 30-year-old firm that took its current name in 2003. Its assets under administration grew by $5 billion during the past year to about $17 billion.

The company helps firms bring investment vehicles to market, including mutual funds, hedge funds and alternative investments such as collective investment trusts.

Gemini provides administration, accounting and technology to firms seeking to launch and market investment products.

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Northern Lights Names a CEO

Northern Lights Distributors, sister firm to Gemini, has named Brian Nielsen as chief executive officer and Bill Wostoupal as president.

According to the company these management changes were adopted "as part of NLD's strategic focus on growth in its sales and distribution platform. "

Nielsen had previously served as president, manager and principal of Northern Lights since December 2005. As chief executive, Nielsen will "will remain focused on the operational and compliance aspects of NLD's business," according to a company statement.

Meanwhile, Wostoupal will continue to serve as executive vice president of Sales and Business Development for NorthStar Financial Services Group, a holding company for several subsidiaries which manage and serve financial assets, including NLD.

In his new role, Wostoupal will lead NLD's sales and marketing efforts, with sales and marketing personnel reporting directly to him. To read the article on MutualFundWire.com, click here

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NorthStar Financial rides wave of outsourcing for growth

Nice story on our parent company, NorthStar Financial Services Group, LLC, and our growth over the last decade. To read the article, click here.

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More Providers Turn to Series Trusts

Series trusts providers are noting a change in those vying for entry to their shared trusts. Series trusts generally provide administrative and distribution services to those looking to enter the mutual fund game for the first time, but providers are increasingly seeing experienced players in the industry turn to series trusts as a way to cut costs and increase efficiency. To read the complete article, log into Fund Industry Intelligence by clicking here.

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A terrible loss in the RIA business of the original breakaway broker

A plane crash takes Patrick Clarke, the founding owner of Orion, Gemini and CLS, who leaves behind a family and friends in grief and three booming companies

“They made it clear that they wanted to sell more stocks, including initial public offerings. How did I feel about that? I told them I didn't think I could do it in all good conscience. So they basically fired me. Yesterday, I had been at the top in terms of production and today I was out of a job. I had a wife and three little boys at home. I was wrestling with worry, wondering how we were going to make ends meet.” — W. Patrick Clarke (says about a 1975 incident) from the introduction of his book, “Change One Letter, Change Your Future.”

One of the great unsung pioneers of the RIA business — and a practically prehistoric wirehouse breakaway — has died in a tragedy that also took the life of one of his sons.

W. Patrick Clarke, 67, co-founder of NorthStar Financial Services Group LLC in Omaha, Neb., died in a plane crash along with one of his sons, Dr. Scott Clarke, 41, near Fresno, Calif., heading home after a day of driving at the Skip Barber Racing School at Mazda Raceway Laguna Seca on California's Monterey peninsula.

The accident occurred on Nov. 10, and the Clarkes and their family, friends and business associates have all reeled from the magnitude of the tragedy.

Influential family

Patrick Clarke was well-known to many people around Omaha but he had a lower profile in the financial advisory business despite being a co-founder and co-chairman of NorthStar, the umbrella organization that owns Orion Advisor Services, LLC, CLS Investments LLC and Gemini Fund Services LLC. Combined, the three companies manage, advise or administer $120 billion of assets.

Two surviving sons remain with the family businesses: Eric Clarke is president of Orion and Todd Clarke, chief executive of CLS Investments.

Many people throughout the RIA business express admiration for the way the Clarkes have created companies that are big and strong, cutting-edge and fast growing.

But the family is also known for the personal warmth that is infused into its corporate culture — an aspect of NorthStar that made the news of the tragedy that much harder to take.

It was, by all accounts, simply the way Patrick Clarke operated — looking out for other people almost compulsively and letting the chips fall where they may.

To read Brooke Southall's complete story, visit RIABiz by clicking here.

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NorthStar Marks 10-Year Anniversary

NorthStar Financial Services Group, LLC (NorthStar), a holding company for several subsidiaries which manage and service financial assets, has marked the 10-year anniversary of its founding by two veterans of the financial services industry, Michael Miola and the late W. Patrick Clarke

Mr. Miola and Mr. Clarke created NorthStar in January 2003 to join together the unique companies they individually established, and to empower investment advisors by offering them a wide range of financial services, including mutual fund servicing, back-office technology and asset management. Ten years later, NorthStar has more than $120 billion in assets under administration and management, employs a staff of over 450 and operates offices in multiple cities.

"NorthStar and its subsidiaries could not have reached this milestone without the dedication of its founders and staff to empowering investment advisors by continually harnessing opportunities across the financial services sector," said Todd Clarke , Chief Executive Officer of CLS Investments, LLC (CLS), NorthStar's Registered Investment Advisor subsidiary. "We grew out of a need in the marketplace for investment advisors to leverage an innovative organization built to meet their needs as well as their clients' needs."

Mr. Miola founded American Data Services, Inc. (ADS), which would later become Gemini Fund Services, LLC (Gemini), in 1983. Thirty years after its establishment, and 10 years after its inclusion in the NorthStar organization, Gemini is a leading provider of comprehensive, pooled investment solutions, overseeing more than $17 billion in assets under administration and continuing to grow. Gemini's assets under administration include the firm's shared fund trusts (Northern Lights Fund Trust I, II and III, as well as Northern Lights ETF Trust, Northern Lights Variable Trust and Two Roads Shared Trust). 

To read the rest of the release, click here.

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Gemini Marks 30 Years of Service to Independent Advisors

Gemini Fund Services, LLC (Gemini), an engaged partner to independent advisors as a provider of comprehensive, pooled investment solutions, has marked the 30-year anniversary of its establishment.

Michael Miola founded American Data Services, Inc. (ADS), which would later become Gemini, in 1983 with the goal of designing a mutual fund accounting system to operate on personal computers. ADS changed the face of the mutual fund sector by providing access to investment advisors that had good track records but could not afford the large mainframe systems required at that time to process the massive daily transaction volumes. (ADS was rebranded as Gemini with the formation of NorthStar Financial Services Group, LLC in January 2003.)

Mr. Miola implemented a unique approach to finding the best money managers and distributing mutual funds, which is still used by Gemini today. This strategy consists of searching for the top independent managers, forming mutual funds around them, and servicing, marketing and distributing each fund in its local geographic area. Thirty years later, the company built by Mr. Miola oversees more than $17 billion in assets under administration and continues to grow.

"Our full-service offering, consultative approach and commitment to our advisor partners have made Gemini a strategic partner to advisors seeking to overcome the barriers of entry to the pooled investment market," said Andrew Rogers , Chief Executive Officer of Gemini. " Michael Miola may not have known it 30 years ago, but his vision and dedication would go on to completely transform the pooled investment arena. As we continue to grow, Gemini will remain at the forefront of enabling small and mid-sized funds to navigate an evolving regulatory environment."

To read the entire release, click here.

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The Democratization of Investment Products

Andrew Rogers, chief executive of Gemini Fund Services, discusses his firm and what the ability for advisors to customize ETFs means for the future of the products industry. To watch the AdvisorTV interview, click here.

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