Morgan Stanley has launched two new funds to offer exposure to different types of alternative alpha strategies.
The Liquid Alpha Capture fund will be managed by Ryan Meredith and Janghoon Kim, and will seek to generate absolute returns through strategies derived from hedge funds.
The Morgan Stanley team will analyse a universe of around 22,000 hedge funds and identify a top tier of between 20 and 50. It will then conduct a bottom-up review of the publicly disclosed holdings of these stars in order to develop quantitative processes for capturing their ideas. The managers will also draw on hedge funds’ alternative beta ideas.
The fund’s annual management charge will be 0.75%, and it will only invest in assets liquid enough to enable daily dealing.
Morgan Stanley has also unveiled a Liquid Alternatives fund, which will invest ‘primarily in non-traditional asset classes’ both directly and through other funds.
As examples of the types of asset the fund will buy, Morgan Stanley cited emerging-market debt, high-yield debt, convertible bonds, real estate, commodities, frontier-market equity, insurance-linked strategies, mortgage-backed securities, infrastructure, private equity, and absolute-return funds.
The Liquid Alternatives fund will be managed by Meredith, Kim, Joseph McDonnell and Rui De Figueiredo. Its annual management charge will be 0.60%.