Australia's Macquarie Funds Management, with nearly AUD30 billion (USD17.6 billion) under management, is looking to launch two domestic equity funds in the coming months that will employ over-the-counter options. "These will have a mix of qualitative, quantitative and trading strategies," said Phil Dolan, head of investment research in Sydney.
The long/short funds will be offered in two versions: a market exposure strategy and a market neutral fund. Dolan said the funds may use OTC put options. "We might use these for short exposures," Dolan explained. However, OTC derivatives will be used minimally, less than 10% of the total portfolio due to the lack of liquidity. Macquarie Funds Management is targeting raising around AUD500 million for the funds, which it is looking to launch by mid-year. The fund manager already uses interest rate, credit, fx and equity derivatives for its portfolios (DW, 6/1/01).
As for counterparties, Dolan said the fund management arm is not restricted to Macquarie Bank and trades with both domestic and international players. It selects firms according to pricing, quality of research and execution.
