Redleaf’s Whitebox to Open Long-Short Stock Mutual Fund

Hedge fund investor Andrew Redleaf’s firm is opening a long-short equity mutual fund for retail investors.

Whitebox Advisors LLC, which has $2.3 billion in assets under management, is starting its second alternative mutual fund, Whitebox Long Short Equity Fund, which seeks to provide positive returns regardless of the direction and fluctuations in the U.S. equity markets, according to a filing with the Securities and Exchange Commission. It will be publicly offered to investors starting Nov. 12 and be run by managers including Jason Cross, Paul Karos and Kurt Winters.

The fund is the successor to Minneapolis-based Whitebox’s long-short hedge fund, whose investor shares returned 8.5 percent, excluding sales charges, in the 12 months ended Sept. 30. The net expense ratio for investor shares is 1.95 percent and the front-end sales charge is 4.5 percent. The firm started its first mutual fund, Whitebox Tactical Opportunities, in December 2011.

Long-short equity fund managers can bet on rising and falling stocks. Private-equity firm KKR & Co. LP plans to open debt funds for individual investors, and fund companies including Franklin Resources Inc. (BEN) and AllianceBernstein Holding LP (AB) have expanded alternative-investment offerings as clients turn away from traditional stock funds.

To contact the reporter on this story: Alexis Leondis in New York at aleondis@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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