Proteom Capital Management, a New York-based fund manger, is hoping its fledgling variance swap funds will take off after struggling for a year. Jonathan Kinlay, ceo, said May's uptick in global equity volatility is leading a resurgence in interest in volatility funds.
Proteom's E-series Global Equity Index Volatility funds were created last year and buy monthly variance swaps on the Standard & Poor's 500. The vol funds make up around half of Proteom's multi-strategy cross-asset class funds, which have only about USD30 million under management. The firm is aiming to raise USD1-1.5 billion across all funds.
"It has less to do with us and more to do with the asset class," Kinlay said. "Volatility is crawling out of its death bed. It will take some months for investors to forgive the performance of the past year." But Kinlay said he is seeing renewed interest from banks, funds of funds and other institutional investors as the climate changes.
"The events of the last couple of weeks have made people aware volatility won't remain niche forever," Kinlay said. "It's a more interesting time for vol products than it has been for the past few years. Hopefully now we will be able to gather more assets."