MainStay Investments Introduces Alternative Strategy Fund-of-Funds
Private Advisors, LLC Subadvises Alternative Strategy Funds to Provide Hedge Fund Strategies through more Liquid Registered Investment Vehicles
New York and Richmond, VA, November 19, 2012 – MainStay Investments, a Barron's top fund family1 and a New York Life company, today announced the introduction of Private Advisors Alternative Strategies Master Fund ("Master Fund") and Private Advisors Alternative Strategies Fund ("Feeder Fund"), (each a "Fund," and together the "Funds"). The Funds seek long-term capital appreciation above equity returns over a full market cycle with volatility that is lower than that of the equity market and returns that demonstrate a low correlation to both the equity and fixed-income markets. The Funds are subadvised by New York Life affiliate Private Advisors, LLC ("Private Advisors") the Richmond, Virginia–based fund-of-funds investment manager with approximately $4.5 billion AUM. MainStay Investments serves as the Funds' investment manager.
"Institutional investors and pension funds have long relied on alternative investments such as hedge funds to diversify their portfolios and achieve returns," said Stephen Fisher, President of the MainStay Funds. "Today, we're seeing more and more demand among individual investors for investments that offer the benefits of hedge funds – long-term capital appreciation, less volatility and a low correlation to the equity and fixed-income markets – with more liquidity and flexibility."
The Funds are structured as "master-feeder" hedge fund-of-funds investment vehicles tailored to small-to-medium sized institutional investors and financial advisors for their accredited individual investors. The Feeder Fund invests substantially all of its investible assets in the Master Fund. The Master Fund invests primarily in private investment funds or "hedge funds" managed by third party portfolio managers. Investment strategies employed by the portfolio managers include global macro, credit, income, event driven, relative value and global long/short equity strategies.
Private Advisors is an experienced hedge fund-of-funds manager with an investment philosophy focused on wealth preservation and achieving strong risk-adjusted returns relative to other investments over time. With a rigorous manager selection process and forward-looking research and analysis, the firm invests with portfolio managers who follow processes that are fundamentally driven and exhibit an emphasis on capital preservation, disciplined investment processes, and application of sound judgment.
Chris Mackay, a Partner at Private Advisors, commented, "We are pleased to be partnering with MainStay Investments in offering investors this type of flexibility and access to our diversified strategies. We believe that the advantages provided by a registered vehicle that
provides for a lower minimum investment threshold, more liquidity, the absence of performance fees at the fund-of-funds level and the convenience of the Form 1099 tax reporting, will provide an attractive option for many qualified investors."
Fisher concluded, "The experience and research acumen demonstrated by Private Advisors over the past fifteen years provides us with great confidence in bringing such a unique product offering to new investors."
For more information regarding the Funds, please visit us on the web at: mainstayinvestments.com/privateadvisors or call (888) 207-6176.
About Private Advisors LLC
Private Advisors, LLC, an affiliate of the Investment Group of New York Life Insurance Company, one of America's strongest and most well regarded financial institutions, manages approximately $4.5 billion in assets with over 70 employees as of September 30, 2012. The firm was founded in 1997 and provides investors with diversified hedge fund strategies as well as expertise in North American small company private equity investing.
About MainStay Investments
With more than $65.5 billion in assets under management as of September 30, 2012, MainStay Investments ("Mainstay") is the mutual fund distribution arm of New York Life. MainStay provides financial advisors access to a powerful mix of autonomous, institutional investment managers, delivered by people who understand the needs of today's financial advisor. The MainStay Fund Family has been designated a top three fund family1 by Barron's for the 10-year time period for three consecutive years (as of 12/31/11, out of 45 mutual fund families). MainStay is an indirect subsidiary of New York Life Insurance Company, a Fortune 100 company founded in 1845 and the largest mutual life insurance company in the United States.2
1. How Barron's Ranks the Fund Families: To qualify for the Lipper/Barron's Fund Survey, a fund family must have at least three funds in Lipper's general U.S.-stock category, one in world equity (which combines global and international funds), one mixed-equity fund (which holds stocks and bonds), at least two taxable-bond funds, and one tax-exempt offering. Each fund's returns are adjusted for 12b-1 fees. Fund loads, or sales charges, aren't included in the calculation of returns, either. Each fund's return is measured against those of all funds in its Lipper category, such as, say, small-cap value. That leads to a percentile ranking, with 100 the highest and 1 the lowest, which is then weighted by asset size, relative to the fund family's other assets in its general classification, world equity, for instance. If a family's biggest funds do well, that boosts its overall ranking. Poor performance in a big fund would have the opposite effect. Finally, the score is multiplied by the weighting of its general classification, as determined by the entire Lipper universe of funds. The category weightings for the one-year results: general equity, 38.04%; world equity, 12.77%; mixed equity, 17.36%; taxable bonds, 27.43%; and tax-exempt bonds, 4.40%. The category weightings for the five-year results: general equity, 40.12%; world equity, 12.32%; mixed equity, 17.30%; taxable bonds, 25.56%; and tax-exempt bonds, 4.70%. The category weightings for the 10-year results: general equity, 41.89%; world equity, 12.30%; mixed equity, 14.44%; taxable bonds, 25.99%; and tax-exempt bonds, 5.38%. The scoring: Say a company has a fund in the general U.S. equity category with $50 million in assets that accounts for half of the company's assets in that category. Its ranking is the 75th percentile. The first calculation would be 75 x 0.50, which comes to 37.5. That score is then multiplied by 38.04%, general equity's overall weighting in Lipper's universe. So it would be 37.5 x 0.3804, which totals 14.265. Similar calculations are done for each fund in the study. Then, all the numbers are added up for a total score. The fund family with the highest score wins, both for every category and overall. The same process is repeated for the five- and 10-year rankings based on their weightings. Ranking data is from Lipper. Source: Barron's, 2/6/12. Overall, MainStay Funds ranked seven for the one-year period, eight for the five-year period, and three for the 10-year period ended December 31, 2011, out of 58, 53, and 45 fund families, respectively.
2. Based on revenue as reported by "Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual)," Fortune magazine, May 21, 2012.
New York Life Insurance Company
New York Life Insurance Company
For more information about MainStay Funds, call 800-MAINSTAY (624-6782) for a prospectus or summary prospectus. Investors are asked to consider the investment objectives, risks, and charges and expenses of the investment carefully before investing. The prospectus or summary prospectus contains this and other information about the investment company. Please read the prospectus or summary prospectus carefully before investing.
Past performance is not a guarantee of future results.
Important Disclosures and Risk Factors
This is not an offering to subscribe for shares in any Fund and is intended for informational purposes only. An offering can only be made by delivery of the Prospectus to "accredited investors" within the meaning of U.S. securities laws. Please carefully consider the investment objectives, risks, and charges and expenses of the Funds before investing. Please read the Prospectus carefully before investing as it contains important information on the investment objectives, fees, charges and expenses, risks, suitability, and tax obligations of investing in the Funds.
The Master Fund invests substantially all of its assets in private investment funds or "hedge funds" managed by third party portfolio managers ("Hedge Funds") that are generally not registered as investment companies under the Investment Company Act of 1940, as amended ("1940 Act"). Therefore, the Funds will not have the benefit of various protections provided under the 1940 Act with respect to an investment in those Hedge Funds. The Funds' investment program is speculative and entails substantial risks. It is possible that an investor may lose some or all of its investment. In addition, an investment in the Fund is not liquid and investors should provide for adequate liquidity outside of their investment in the Fund to meet their foreseeable liquidity needs. Before making an investment decision, an investor and/or its adviser should: (i) consider the suitability of this investment with respect to its investment objectives and personal situation, and (ii) consider factors such as its personal net worth, income, age, risk tolerance, and liquidity needs. Short-term investors and investors who cannot bear the loss of some or all of their investment and/or the risks associated with a lack of liquidity should not invest in the Fund. The Funds provide limited liquidity, and shares in the Funds are not transferable. Liquidity will be provided only through repurchase offers made by the Funds from time to time, generally on a quarterly basis upon prior written notice.
There can be no assurance that the Funds' investment objective or those of the Hedge Funds in which the Master Fund invests will be achieved, and results may vary substantially over time. The Hedge Funds may engage in speculative investment strategies and practices, such as the use of leverage, short sales, and derivatives transactions, which can increase the risk of investment loss. Although Private Advisors expects to receive detailed information from each Hedge Fund on a regular basis regarding its valuation, investment performance, and strategy, in most cases Private Advisors will have little or no means of independently verifying this information. The Hedge Funds are not required to provide transparency with respect to their respective investments. By investing in the Hedge Funds indirectly through the Funds, investors will be subject to a dual layer of fees, both at the Fund and Hedge Fund levels. Please see the Prospectus for a detailed discussion of the specific risks disclosed here and other important risks and considerations.
MainStay Investments is a service mark and name under which New York Life Investment Management LLC does business. MainStay Investments, an indirect subsidiary of New York Life Insurance Company, New York, NY 10010, provides investment advisory products and services. The MainStay Funds are managed by New York Life Investment Management LLC and distributed through NYLIFE Distributors LLC, 169 Lackawanna Avenue Parsippany, NJ 07054, a wholly owned subsidiary of New York Life Insurance Company. NYLIFE Distributors is a Member of FINRA/SIPC.