Altegris has launched the Altegris/AACA Real Estate Long Short Fund (RAAAX), which seeks to deliver higher risk-adjusted returns than traditional long-only real estate strategies, while also potentially providing an inflation hedge and a durable stream of income.
"Real estate holdings are an essential component of a well-diversified portfolio designed to build and preserve capital in all market conditions," says Jon Sundt, president and CEO of Altegris and the Altegris Family of Mutual Funds. "We are giving investors an opportunity to achieve strong, inflation-hedged returns across an entire real estate market cycle."
The fund's sub-adviser, American Assets Investment Management (AACA), uses a long/short real estate strategy focused on investing in equity securities of real estate investment trusts (REITs) and real estate companies in sectors where tenants are not inclined to move. These situations manifest themselves when sectors have few participants, tenants have high demand drivers for their businesses, high entry barriers exist for new owners and developers and tenants have high barriers to exit.
"Our ability to make both long and short investments, coupled with the fact that we are not beholden to shadowing an index, gives us the freedom to create a portfolio composed of only those real estate securities we believe to have greatest total return potential," says Burland B East III, portfolio manager and CEO of AACA. "High-quality real estate run by high-quality management teams in high-quality locations may provide consistent capital over the long term, but our investment strategy seeks to mitigate the downside effects in the event of inflation."