Fidelity is trying to make hedge funds accessible to the masses (or at least to people with investable assets of greater than $50,000) by partnering with Blackstone Alternative Asset Management (“BAAM”). The agreement gives Fidelity Investment’s Portfolio Advisory Service exclusive access to Blackstone’s Alternative Multi-Manager Fund, a hedge fund of funds that is currently invested in 11 managers across a broad range of alternative investment strategies.
Fidelity has put $1 billion of client assets into the fund, which has a net expense ratio of 2.4%. This is an extremely steep price to pay for alternative exposure – there are 3 layers of fees embedded in this product (Fidelity, Blackstone, and the underlying hedge fund manager). That said, it is one of the few ways that retail investors can get an allocation to this asset class.
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