AlphaMetrix released a statement saying the firm would begin orderly redemptions of client assets held on its managed account platform and a spokesperson said the firm will remain a viable entity.
The statement reads:
“In light of recent redemption requests, AlphaMetrix has determined that its sponsored funds will no longer be able to effectively trade the investment strategy employed by each trading advisor. As a result, AlphaMetrix has decided that it is in the best interest of all investors for the funds to cease trading as of October 31, 2013, and enter into an orderly liquidation. For all investors who have not already redeemed, it is anticipated that AlphaMetrix will distribute 90% of the proceeds to investors on or about November 21, 2013. The balance will be distributed upon the completion of a final audit.”
As reported yesterday, plans for the firm’s Miami Beach conference are in place and the firm will likely attempt to engage in some sort of workout with CTAs with whom it owes fees. “The January 2014 conference remains on track and AlphaMetrix will continue to operate its risk, research and events business,” said Conor Shea, a press spokesman for AlphaMetrix. The viability of the AlphaMetrix managed account platform remains in question.
On October 18 it was reported the firm was in negotiations for a sale or acquisition of a capital source. Then on October 21, the National Futures Association (NFA) handed AlphaMetrix an enforcement action that essentially said the firm must pay fees owed to managed futures commodity trading advisors (CTAs) or it would essentially be required to cease trading operations. The firm had engaged in a series of hectic negotiations with a variety of capital sources and potential suitors in recent weeks, but investor redemptions appear to have been too significant to keep the managed account platform alive.
It is unclear how the bankruptcy will be structured and how much of the debt burden will be assigned to the account platform, which could engage in a bankruptcy.
DISCLOSURE: These are the opinions of the author and may not have considered all risk factors. Nothing on this web site should be construed as an individual recommendation, talk to your independent advisor. The author and Opalesque may have relationships with those people they cover in the publication. Mr. Melin provides a full disclosure of his business relationships to regulators and certain eligible participants who engage him in consulting projects. Managed futures investing involves risk and there are no guarantees of safety or future performance being implied. Managed futures can be a risky investment. This web site and its content is subject to the terms of the web site. Risk Disclosure and terms of web site are available here: http://www.uncorrelatedinvestments.com/templates/Disclaimer.html Performance information received on this site is provided by third parties and deemed reliable but there is no guarantee relative to same. Performance reporting sources and quality assurance techniques may include, but are not limited to: disclosure document, CTA self reporting, brokerage firm reporting, consultant reporting, spot checking other reporting databases; nonetheless no guarantee of accuracy or implication performance verification or auditing is being made by the publishers. The CTA Database is a project separately managed from www.uncorrelatedinvestments.com.