Gemini Alternative Funds - Best Managed Accounts Platform
Gemini Alternative Funds, LLC (Gemini Alt) operates an open architecture environment that facilitates the creation of dedicated managed accounts (DMA) for large institutions. The infrastructure is supported by Gemini Alt's parent company, NorthStar Financial Services Group LLC (NorthStar), which has more than USD455 billion in AUM (as of 8/31/16).
As well as the DMA platform, Gemini Alt also operates the Galaxy Plus platform, a CFTC and NFA regulated platform that provides a lower investment option to non-pension fund investors.
"Today, Galaxy Plus has approximately USD500 million in assets. The DMA side of the business will be growing significantly over the next couple of months as we complete the onboarding process of a large pension plan. I would estimate that by year-end, total assets on the DMA platform will be close to USD1 billion," comments David Young, President of Gemini Alt.
Both platforms aim to provide Gemini Alt's clients with an institutional-level investing experience. In total, Gemini Alt has USD700 million in assets.
DMA business is essentially an operational infrastructure designed to provide large asset owners with complete transparency and control of the investing experience.
It provides an outsourced solution for all operational aspects of managing an investment platform. This includes legal structuring, adviser research and selection support, middle- and back-office support, granular reporting, risk management support and trade rebalancing among advisers in the portfolio.
"Galaxy Plus was created to provide smaller institutional investors with many of those same attributes," confirms Young. "It is a commingled fund structure that provides access to a selection of trade advisors through a single access point and shares many of the same attributes of our DMA platform but at a lower investment level."
Galaxy Plus, which launched in December 2014, currently has a global mix of 20 managers; approximately 30% Europe, 60% US and 10% Asia. All 20 investment advisors are running managed futures strategies; systematic strategies, discretionary, trend following, etc.
"Everything we do starts with the investor. We work with investors to find the managers they want to allocate to within a managed account structure," says Young, adding that Gemini Alt is also in the process of launching a new platform that will give investors access to liquid hedge fund strategies.
"We expect it to go live mid-October. It will offer the ability for investors to invest in equity-based hedge fund strategies providing the same type of investing experience as Galaxy Plus. We should have five managers on the platform by year-end," confirms Young.
For the DMA platform, the institutional client currently being onboarded – as with every institutional investor – has preselected its managers (Gemini Alt facilitates the investment process). Aside from selecting managers, each DMA client has the freedom to choose their preferred service providers (fund administrator, prime broker, etc) that will operate within the infrastructure solution.
"Ultimately, anyone who works with us, across both platforms, makes their own investment decisions. We provide the technology that allows them to build the portfolio. We provide them with diligence on the underlying managers, but we don't provide investment advice," explains Young.
On winning this year's award, Young comments: "We're elated. I think it's important that there are platforms like ours within the industry (alongside the large bank-owned MAPs). It's easy for us to be cost-effective and provide both investors and advisors with solutions at a price they can afford."