The Chief Executive Officer of Catalyst plans different investment approaches

Catalyst Fund’s CEO Jerry Szilagyi declared in a recent interview that the long-term equity funds are “definitely not the focus” and they’re planning alternative investment strategies.
 10 May 2017 – Benzinga 

Our main focus is on what are sometimes referred to as liquid alternative strategies,” Szilagyi said. “That includes options trading strategies, managed futures, multi-alternative macro funds […] We also have some long/short equity and then some strategies that are kind of in between traditional and alternative, such as MLPs and bank loan funds.”

Szilagyi: This fund has a track record going back about 19 years. It was a hedge fund until about a year and a half ago, when we converted it to a mutual fund.

What this means is we changed the legal structure of the fund from a limited partnership to a mutual fund trust. So, pretty much everything else about the fund remained the same: the shareholders, the investment strategy, the portfolio manager, etc.

Now it becomes more regulated under the SEC and, because of that, it then becomes available to more retail investors instead of just accredited investors.

One is that the funds is now available to a larger group of investors, general retail investors as opposed to just accredited investors. Another advantage is that, as an open end mutual fund, there is a lot more liquidity (unlike a hedge fund) and transparency — due to things like the daily calculation and report of the NAV.

So, I would say those are the four major benefits of the mutual fund structure: it’s more access by investors, daily liquidity, more transparency and more regulatory oversight.

The Catalyst Millburn Fund was one of those funds that was positive in 2008. Many of the managed futures strategy funds that were around in 2008 also showed positive returns. So, that is really one of the main benefits of these liquid alternative strategies and, when they are included in investors’ portfolio, they play a very important diversification and risk management role.