AQR to offer mutual funds only through advisers

Retail investors will no longer be able to buy mutual funds from AQR Capital Management without going through a financial adviser, starting Oct. 30. AQR, which is primarily an institutional shop with $29 billion in assets under management, began introducing a lineup of retail mutual funds in January 2009 — at a time when many other alternatives managers were seeking to make their portfolios available to individual investors, said David G. Kabiller, the founding principal. “There was this notion that individual investors didn’t have access to good ideas,” he said. “There was this idea around the democratization of alternatives.” But many of AQR’s mutual funds are complicated offerings and often require detailed explanations, Mr. Kabiller said. For example, the firm launched on Oct. 1 the AQR Risk Parity Fund Ticker:(AQRNX), which uses futures contracts across an array of asset classes to manage risk and provide returns — a complex strategy that could be unfamiliar to many retail investors. “Ninety-five percent of our assets come from advisers now,” Mr. Kabiller said. Overall, AQR has eight mutual funds with $2 billion in assets. “Our intent was always to target financial advisers, but now it will be exclusive,” Mr. Kabiller said. Current retail investors can continue to buy shares of the funds they own directly, he said. In the wake of the market crash, many alternatives managers have realized the importance of advisers in distributing their offerings, said Geoff Bobroff, a mutual fund consultant. “If you look at all the absolute-return funds and long-short products that are coming to market, [the managers] all realize they can’t sell on a direct basis because of the complexity of the products,” he said.