Hamon Investment Group, with over USD300 million under management in Hong Kong, plans to use over-the-counter equity options for its newly launched long/short fund. The fund, dubbed Hamon Oriential Long/Short Fund, started investing last month with USD25 million under management and will use up to USD5 million (notional) in single-stock options to hedge downside risk for cash positions, according to Vincent Cheng, cio. "This will be for hedging positions in addition to other stocks and index futures," noted Cheng.
The fund will look to sell calls as well as purchase puts to hedge its cash exposure. Hamon's prime broker is Goldman Sachs Global Securities Services. Ana Fan, client services manager, noted that Hamon trades with additional counterparties but declined to name them. An institutional marketer at Goldman declined comment. The Oriental Long/Short Fund is able to leverage its assets to 130% or short stocks to minus 30% of its assets, according to Fan.
