The folks at Litman Gregory Fund Advisors, LLC, of Walnut Creek, California are excited to launch their High Income Alternatives Fund, which “seeks to generate a high level of current income from diverse sources, consistent with the goal of capital preservation over time.”
After months of advisor selection and due diligence, the fund will launch September 28, 2018. Here are links to recently published fund commentary/fact sheet and webinar registration. The webinar will occur Monday, September 24, 2018 1:00 – 2:00 PM Pacific Time.
As with all its Masters funds, Litman Gregory allocates assets among multiple investment managers with strong track-records employing “different but complementary strategies.” The firm believes this approach can “further enhance the risk-adjusted return potential of an overall fund portfolio over a full market cycle.” The starting lineup for High Income Alternatives:
- Ares Management will manage the “Alternative Equity Income” strategy, with a launch allocation of 15%,
- Brown Brothers Harriman (BBH) will manage the “Credit Value” strategy, with a 32.5% allocation,
- Guggenheim Partners will manage the “Multi-Credit” strategy, with a 32.5% allocation, and
- Neuberger Berman will manage the “Option Income” strategy, with a 20% allocation.
BBH’s managers include Andrew P. Hofer and Neil Hohmann, who also manage BBH Limited Duration (BBBMX), an MFO Great Owl, and BBH Income (BBNIX). All three BBH bond funds are top performers.
Guggenheim’s B. Scott Minerd and Anne Walsh manage Guggenheim Taxable Municipal Managed Duration (GBAB) CEF, Guggenheim Strategic Opportunities (GOF) CEF, Guggenheim Limited Duration (GILHX), all three are MFO Great Owls, and Guggenheim Investment Grade Bond (SIUSX), an MFO Honor Roll fund.
Neuberger Berman’s Derek Devens manages Neuberger Berman US Equity Index PutWrite Strategy (NUPIX), a two-year fund with top quintile risk adjusted returns based on Sharpe.
Litman Gregory’s Chief Investment Officer Jeremy DeGroot will oversee the subadvisors as he does with the firm’s largest fund Masters Alternative Strategies (MASFX/MASNX), which we profiled last year.
The fund will be seeded with $60M from Litman’s managed accounts. It will target 5% income to investors distributed monthly, tempered risk, and low correlation to equities and traditional fixed income.
Given its depth of analysis, experienced staff, and industry knowledge, alternatives makes an ideal space for Litman Gregory to add value.