Gemini Fund is pleased to offer a few options to investment advisors who are interested in launching a mutual fund but do not want to be the named advisor. We have partnered with a few firms, including Advisors Preferred, to help bring these funds to market.
There can be several variations of a sub-advisor / named advisor relationship. It’s been our experience that typically the sub-advisor for a mutual fund is responsible for the portfolio management of the fund.
The named advisor is responsible for trade execution, daily/weekly/monthly compliance review and active distribution of the fund, amongst other oversight responsibilities. The contract to manage the assets of the fund is held by the named advisor. Thus the named advisor is the responsible party for all fund expenses until the fund has reached its breakeven level. Once the fund reaches breakeven, the named advisor would receive the fund’s associated management fee. Sub-advisors are paid by the named advisor. The fee agreements can vary, but typically, it is a percentage of the management fee once the fund is above breakeven.
It’s important to note that the sub-advisor has limited control over the branding of the fund and the fund’s distribution. Because the named advisor is ultimately responsible and holds the contract to manage the assets, the final decisions for the fund are made by the named advisor. In addition, the named advisor does have the authority to terminate the sub-advisor from the fund.
If you are interested in learning more about sub-advisor opportunities, please contact us at 855-891-0092. You can also visit Advisors Preferred online below.
Visit Advisors Preferred