For proof that even the most regulated corners of the asset management space can be circumvented with enough effort, look no further than the $1.8 billion Infinity Q Diversified Alpha Investor Fund (IQDAX), which has halted investor redemptions in the mutual fund due to alleged portfolio manager fraud.
On Monday, Infinity Q Innovative Investments informed investors in the fund that it had received approval from the Securities and Exchange Commission to “suspend redemptions and postpone the date of redemption payments beyond seven days” because it is “unable to value certain assets held in the fund.”
The SEC’s order states that the fund learned on Feb. 18 that Infinity Q chief investment officer and company founder James Velissaris had been tweaking the methodology for counting certain asset valuations, which raised doubts about the accuracy of the reported fair value of those fund holdings.
Infinity Q could not be reached for comment for this story.
The company posted on its website confirming the SEC findings on Feb. 19 stating that “it could not value the assets for purposes of calculating the fund’s net asset value.”
According to the company statement, Velissaris “has been relieved of his duties,” effective Feb. 21.
As an open-end mutual fund, the alternative strategy fund is required to be able to redeem its shares at the net asset value every business day.
The company stated that it intends to proceed with a liquidation plan and distribution to shareholders, both of which will be presented to the SEC for approval. There is no estimate as to when the liquidation and distribution will be completed.
Morningstar analyst Bobby Blue described the multi-strategy alternative fund as “pretty complex, and not something you will see in most retail investor portfolios,” but also doesn’t see a reason the underlying assets would have been so difficult to track.
“It’s a complex model, but the variance and volatility swaps they were using are based on the volatility of the underlying instruments,” he said. “Those pricing numbers are available and they should have been able to price them.”
The six-year-old fund, which has a four-star performance rating from Morningstar, is up less than 1% so far this year, and gained 5.9% last year.
By comparison, the S&P 500 Index is up 3.3% this year and gained more than 16% last year.
Todd Rosenbluth, director of mutual fund and ETF research at CFRA, said the Infinity Q fund is an example of how “alternative strategies can often be opaque making it hard for advisors to assess the risk and reward potential.”
“However, it is extremely rare for any fund to halt redemptions,” he added. “We don’t think this alone should steer advisers away from alternatives.”
A 5-4 ruling preserves the Federal Reserve's independence for now, but the legal fight over presidential removal power is far from settled.
For years, large firms have been facing penalties and questions from regulators over interest rates for clients’ cash accounts.
Market volatility can be stressful, but it also represents opportunity for advisors and their clients.
After years of mixed signals and shifting timelines from Jamie Dimon, Wall Street sources suggest the race to lead JPMorgan Chase has entered its decisive stretch.
Advisors and broker-dealers adjusting to the March 2026 threshold change face bigger challenges around back-end monitoring than the new dollar limit itself.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
