Atradis Fund Management, a recently established hedge fund manager in Singapore, is looking to use over-the-counter foreign exchange options. The fund, dubbed the Atradis Barracuda Fund, began trading earlier this month and plans to use OTC currency options to hedge currency risk on equity positions in the Asian region, noted Richard Magides, fund manager. The year-end target for assets under management is USD70 million.
"Generally, we look to hedge all our currency exposure but our exposure to OTC products is limited," said J.P. Riña, manager of investor relations, adding that the fund plans to limit its use of over-the-counter derivatives to 10% of assets. "We look to obtain as much liquidity from the market as possible," noted Magides.
The fund, which is market neutral, employs strategies such as index arbitrage, warrant arbitrage and volatility dispersion in the Asian markets.
Atradis' prime broker is Goldman Sachs Global Securities Services. For derivative transactions, Atradis will choose counterparties on the basis of price. Sam Stubbs, executive director at Goldman in Hong Kong, said, "We're delighted to do business with them."
