The recently launched Truk Opportunity Fund, a hedge fund specializing in private investments in public equity (PIPE), is likely to enter over-the-counter derivatives including options. Michael Fein, partner in New York, said the fund directly invests in small and mid-cap public companies through shares and convertible securities, which convert into common stock. Options and warrants will be bought and sold as a means of hedging these investments, he said.
Fein declined to specify the current assets of the fund, although said it expects to have USD150--200 million under management by year-end. Citigroup Global Markets is the prime broker, but the fund has not yet decided on derivatives counterparties. The fund has agreements with several firms in addition to Citigroup and may shop around to ensure best execution, Fein said.