PEO Partners and AlphaQuest roll out actively managed ETF that employs private equity strategies

Published 28/01/2025, 15:30
© Reuters.

Investing.com -- PEO Partners, LLC, a private equity liquid alternatives platform, and AlphaQuest LLC, a research-oriented alternative asset management firm, announced on January 28, 2025, the launch of an actively managed ETF named PEO AlphaQuest™ Thematic PE ETF (Ticker: LQPE). The ETF combines equity and derivatives strategies, targeting public companies that align with the investment themes and characteristics of traditional private equity funds focused on leveraged buyouts.

The derivatives strategies involve trading futures contracts, providing increased equity market exposure that private equity funds typically achieve using leverage. In addition, they employ a unique investment strategy aimed at reducing downside volatility. The combined equity and derivatives strategies aim to deliver returns that are either excess or comparable, with lower volatility, to public equity markets represented by the Russell 2500 Index.

Tidal Financial Group will serve as the ETF’s investment advisor, while PEO and AlphaQuest will act as the sub-advisors. PEO will handle the daily management of the equity strategy, and AlphaQuest will manage the derivatives strategies.

Randy Cohen, Co-Founder of PEO, expressed excitement about the partnership with AlphaQuest and Tidal, describing the strategy as innovative and benchmark-agnostic, with the portfolio’s investment themes centered around private equity. He believes the strategy will offer a unique investment performance with potential for long-term capital appreciation and manageable drawdowns during market upheavals.

Nigol Koulajian, Founder and CIO of AlphaQuest, mentioned the firm’s plan to complement PEO’s equity strategy by deploying a trend-based hedging program that seeks to reduce downside volatility of performance compared to public markets. He also noted the use of trading instruments that increase equity exposure, which private equity funds typically achieve through traditional leverage.

Gavin Filmore, CRO of Tidal, stated that LQPE offers investors an appealing opportunity to access a portfolio that emulates investment themes typical of private equity funds. He expressed enthusiasm about partnering with PEO and AlphaQuest, whose state-of-the-art investment platforms form the foundation for this innovative offering.

The LQPE ETF is available through various channels including broker-dealers, investment advisors, and other financial services firms such as TD Ameritrade, Betterment, Charles Schwab (NYSE:SCHW), E Trade, Fidelity Investments, Robinhood (NASDAQ:HOOD), and Vanguard.

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