January 16, 2009
Gemini Fund Services Integrates ReFlow’s Redemption Service into Its Fund Operating Solutions
Firm is among new clients fueling 13% jump in ReFlow’s business in 2008.
(San Francisco, CA) ReFlow Management Co., LLC, today announced that Gemini Fund Services, LLC, a provider of fund operating solutions, is integrating ReFlow’s Redemption Service into its Northern Lights Shared Trust, an umbrella operating structure for small- and mid-sized mutual funds. ReFlow is a global provider of tools that help mutual funds improve performance by managing the impacts of shareholder flows.
Gemini is integrating ReFlow’s Redemption Service into its Transfer Agency services, thus enabling its clients to directly initiate and monitor use of the service.
“Adopting ReFlow allows us to be more competitive as a service provider by offering a cutting-edge solution that brings ETF-type efficiencies to mutual funds,” said Andrew Rogers, President of Gemini Fund Services. “When our shared trust clients have redemptions, they must sell pieces of every holding,” Rogers explained. “the brokerage and transaction costs can be significant, so ReFlow’s in-kind redemption makes a great deal of sense. We hope all our clients will use it.”
Gemini Fund Services is among six new mutual fund complexes,that have approved use of ReFlow services in 2008, contributing to a surge in the firm’s growth over the course of the year. Those new client relationships represent 98 funds and more than $50 billion in assets under management, During 2008, ReFlow provided more than $1.08 billion in capital to its mutual fund clients, a 13% rise over the previous year’s activity.
“This difficult environment has really dramatized how much the impacts of shareholder flow can hurt fund performance,” commented Paul Schaeffer, who became President of ReFlow in May 2008. “Many mutual funds have been hard-hit by redemptions, and traditional liquidity sources have dried up or become prohibitively expensive. So it’s not surprising that the industry is discovering ReFlow as a cost-effective and accessible solution.”
ReFlow’s toolkit has now been approved by the boards of 18 mutual fund families, representing more than $272 billion in assets, for use by 409 funds. ReFlow has provided more than $2.23 billion in liquidity to its clients to date.
ReFlow Redemption Service offers mutual funds cash as needed to cover redemptions in exchange for fund shares, which can be redeemed at any point within 28 days. In the interim, ReFlow is a shareholder in the fund and earns a transaction fee. ReFlow’s service lowers transaction costs and capital gains distributions, since funds are able to avoid selling securities for cash; they also gain control over the timing of transactions.
Gemini expects many of its Northern Lights Shared Trust clients to take advantage of ReFlow’s “in-kind” redemption option, which allows funds to redeem ReFlow’s holdings with securities rather than cash. Funds choosing the in-kind option can further increase tax-efficiency by selecting the lowest-cost-basis lots of the securities on their sell lists for redemption of ReFlow’s position.
About Gemini Fund Services, LLC
Gemini has been a pooled investment solutions provider for mutual funds, hedge funds, and alternative investment products for over 25 years. In addition to providing solutions to advisers with existing funds, Gemini also partners with advisers that are interested in creating new investment products. In the past three years alone, Gemini has launched over 75 funds. For more information please visit www.geminifund.com.
About ReFlow Management Co., LLC
Founded in 2002, ReFlow serves U.S. mutual funds and European investment funds (UCITS). The firm is headquartered in San Francisco with an office in Luxembourg.
For more information about ReFlow and its Redemption Service, please visit www.reflow.com. For more information on Gemini Fund Services and its Northern Lights Shared Trust, please visit www.geminifund.com.