DSC Quantitative Group, a research-focused alternative investment firm, has launched its first strategy that replicates private market returns in tracking certain Cambridge Associates benchmarks.
The DSC CA Global Private Equity & Venture Capital Strategy is seeking returns that track global buyout, growth equity, and venture capital returns but in a liquid firm, officials announced this week.
“There is strong demand from investors for private equity strategies that simultaneously offer diversification, ‘beta-plus’ returns, and liquidity,” said DSC Chief Executive Officer Arthur Bushonville. “DSC is a leader in private equity replication products and CA is a leader in private investing. Our ability to incorporate CA’s aggregated, industry-level benchmark data into our portfolio construction process allows DSC to create a unique platform of products.”
The firm was launched in 2012 by Bushonville, who worked within the investable hedge fund index operation at Hedge Fund Research in Chicago, and Andrew Bluhm, who is the founder and managing principal of Delaware Street Capital, an opportunistic hedge fund.
The new DSC strategy is offering investors access to broad private equity-like exposure and can be used to mitigate single manager and vintage risk, with lower overall fees than traditional private equity investments. In addition, officials said, the strategy seeks to minimize downside risk while still allowing for enhanced returns through the systematic implementation of a volatility control model. Finally, the strategy intends to deliver flexibility to investors seeking liquidity and an ability to customize as needed.
“Increasingly investors are seeking more flexible, liquid portfolio management solutions that complement — but that cannot easily be provided by — direct investments in private equity funds; for example, a holding place for capital committed to private funds but not yet called, or providing private equity exposure to the wealth market,” said Andrea Auerbach, global head of private investments at Cambridge Associates. “We think DSC’s approach may offer a solution to some of these challenges.”
