Superfund
In an era of low returns, alternative assets start to look better and better to the average investor as they get frustrated with low returns. This is why a lot of hedge funds are seeing huge inflows of cash. But at least hedge funds are only marketed to rich, wealthy investors. Right?
While technically true, there is a new breed of “fund” being agressively marketed to middle-class individual investors. A recent New York Times article entitled “Have I Got a Fund for You,” describes one such fund, Superfund. They are currently trying to air a commericial advertising their “fund”.
Hedge funds, by their very nature, can not advertise; they can not have more than a small number of non-qualified investors. The Superfund is not organized as a hedge fund but as a “managed futures funds that are publicly registered partnerships.” This way they can bypass the regulations that protect small investors.
I might think that they are just trying to provide a service to a previously unserviced population. But once I saw their fee structure, I realized that it was much closer to to a fleecing than a service. According to the NY Times: “Superfund is guaranteed at least 8.75 percent in brokerage and management fees, and can take up to a 25 percent cut of any profits after expenses in any month when a fund reaches a new high.” The horror! The horror! (sp?)
