Bright, Shiny, and Sharp: Practical Considerations for Advisers Seeking to Manage an Alternative Mutual Fund

September 15, 2014

"Alternative Funds are the bright, shiny object... but they are a sharp object.”1 That is how Andrew Bowden, Director of the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) described alternative mutual funds earlier this year. Bright and shiny because there is high investor demand – assets under management in alternative mutual funds rose 63% in 2013, representing 32% of all inflows into mutual funds.2 Sharp because of the many potential pitfalls in trying to adapt an alternative investment strategy to work within the confines of a mutual fund.