Summary of Investigation

Cohen Milstein is investigating issues concerning the selection and offering of investments known as “managed futures” funds as choices in employer-sponsored 401(k) investments or defined benefit pension plans. 

What are Managed Futures Funds?

A managed futures fund is an investment fund (usually a hedge fund) that is meant to provide an alternative investment strategy based on diversification by trading in financial and commodities futures markets.  As a result of this alternative strategy, managed futures funds are designed to reduce portfolio volatility and risk, without significant negative impacts on return, thereby increasing the ability to earn profit in virtually any economic environment.

Scope of Investigation

The investigation is focused on a few specific issues:

  • Excessive fees: the fee structures of a managed futures fund may be excessive. Many hedge funds operate on a “2 and 20” fee structure, meaning that the investor pays 2% of assets under management and a 20% performance fee for any returns on the investment. However, many managed futures funds have base fees substantially higher than 2%, and also charge the 20% performance fee on top of that. In some cases, the fees from managed futures funds may cost as much or more than the returns from the investment.
  • Self-dealing: In some cases, the investment advisor or broker who advises investors to choose managed futures is receiving commissions based on assets invested in the managed futures fund. This conflict of interests means that the broker or advisor may be selecting the investment for their own gain.
  • Inappropriate investment strategy: The investment strategy pursued by the managed futures fund may not be prudent, or it may not be the same as the investment strategy presented to investors. If this is true, the investor may have claims for losses that are as a result of the imprudent investment strategy.

We are particularly interested in investments in the following list of funds:

  • ESSENTIA spc - Managed Futures (B)
  • Lancelot Global PCC - The CMIM Agile Managed Futures Fund
  • Golden Peak Managed Futures - A
  • Primasia Hedge Fund
  • Prestige Gold Plus USD
  • Amethyst Managed Futures
  • BGB Opportunity Fund
  • Nuveen Long/Short Commodity Total Return Fund
  • Nuveen Diversified Commodity Fund
  • FTC Futures Fund Classic B EUR
  • Smaragd Managed Futures Fund
  • Blue Danube Fund Futures Select Dis
  • Morgan Stanley Spectrum Technical LP
  • Merrill Lynch Systemic Momentum FuturesAccess LLC
  • Grant Park Futures Fund LP
  • Altegris Winton Futures Fund
  • Campbell Strategic Allocation Fund L.P.
  • BlackRock Global Horizons I L.P.
  • Managed Futures Premier BHM Fund
  • RJO Global Trust
  • Morgan Stanley Spectrum Strategic Fund

If you are a participant in or the fiduciary of a Plan who is concerned about the managed futures fund in your 401(k) plan or defined benefit pension plan, you may contact us to review your plan’s information.  There is no fee for our initial review of and consultation on this matter.

What Information Do We Need From You

We will want to obtain some information in order to investigate your claim, including:

  • Account statements for the managed futures investment
  • Any offering memoranda or prospectuses for the managed futures fund
  • Any  fee disclosures which show the amount of fees paid to the managed futures fund

Whom to Contact for More Information

If you think you may have suffered losses to your retirement plan because a managed futures fund is performing poorly or charges excessive fees, or if you have information which might assist us in the investigation of such allegations, please contact one of the following persons:

Michelle C. Yau, Esq. myau@cohenmilstein.com
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W., Suite 500
Washington, D.C. 20005 
Telephone: 888-240-0775 or 202-408-4600