A family-based office managing its own fund, while not a new concept, is quite unusual today. But the Morgan Group, based in Rhode Island, U.S., has offered its first vehicle, The Morgan Group Fund, in July 2006. Using quant-based systems to purchase very liquid equities, this fund is classified as “market neutral” and is a long/short vehicle.
This new entity is marketed as an “absolute return” fund, which can go either net long or short, along with its market neutral strategy. At the moment, United States’ equities are the sole target of this fund.
Their annual management fee is attractive at 1.5%, less than the usual 2.0% hedge fund charge, but it does carry the normal 20% fee of generated profits. Minimum investment is fixed at a manageable $250,000, keeping it within classic hedge fund parameters. Organized as a fund to manage assets generated by successful CEO’s and entrepreneurs, the Morgan Group Fund uses Kirkpatrick & Lockhart, Nicholson, Graham as its legal counsel and depends on Heald Hoffmeister to handle corporate auditing requirements.
Projecting great success as a niche fund, The Morgan Group hopes to generate high level respect in the recently popular arena of absolute return hedge funds. Time will prove if a market neutral fund can achieve the goal of consistent absolute returns.