Duncan Capital Group, a privately owned merchant bank with investment banking and fund management business lines, is considering utilizing total return swaps and over-the-counter options as a means of taking short and portfolio private equity exposures in its planned DC Opportunity Fund.
Jeff Haas, structurer and trader in New York, said such trades would likely be executed in limited circumstances and would reference private equity. He was unable to specify which factors would provoke the manager to enter derivatives, saying it would be deal specific. The fund is timetabled for launch next month and is expected to kick-off with assets of between USD5-10 million.
Duncan Capital has relationships with several potential counterparties, who would be selected according to factors including price, said Haas, declining to specify firms. The fund does not have a prime broker.
