Liquid alts are also known as 40 Act funds because they were created by the U.S. Congress in 1940.
It has blurred the distinction between formerly segregated parts of the industry—notably hedge funds and mutual funds—and led to competition between the various groups.
Investment advisors, meanwhile, have been hard at work learning about this new area and how to incorporate it into their asset management and advisory activities.
Most recently, the growth of the industry has piqued the interest of the Securities and Exchange Commission (SEC) which has issued in early 2014 announced it would conduct a regulatory sweep of the largest of these alternative investments.
[6] Liquid alternatives had poor performance in 2010s, with only a 1.66% average annualized gain after charging relatively high fees.