A group of ex-Merrill Lynch equity derivatives traders is preparing to launch a market-neutral equity derivatives hedge fund. The fund, dubbed Titan Volatility Fund, will have a net long vol bias but will not take directional bets on the market, said Steve Cohen, chief operating officer in New York. Russell Abrams is the founder of the fund, and former co-head of U.S. equity derivatives trading and convertible arb at Merrill in New York. Danny Waldron and Ragu Raghavan, both senior equity derivatives traders at Merrill, joined the fund last week. The three were unavailable for comment late last week.
Now is a good time to launch a fund of this sort because the market has been volatile, said Cohen. "We'll do best in times of market stress," he added. It will initially use listed equity options. There are no specific plans to use over-the-counter instruments at the moment. It will hire opportunistically, said Cohen.
The fund launches at the beginning of March, and will likely have USD250 million under management at that point, but it is still in fund raising mode, according to Cohen. Although some high-net-worth individuals are invested, the vehicle is mainly pitched to institutional investors.
