U.S. hedge fund manager Pine River Capital Management will purchase credit and equity derivatives to hedge its Ishin Fund, an Asian convertible arbitrage fund slated for launch this month. Brian Taylor, principal in Minneapolis, said the fund will buy callable asset swaps and credit-default swaps to hedge its convertible portfolio. Taylor will also consider equity derivatives, including single stock options and variance swaps, to protect the fund's positions. Pine River anticipates growing the fund assets to around USD100 million within six-months. The firm currently has assets of around USD275 million.
Prime brokerage for the new fund is shared between Goldman Sachs, Morgan Stanley and Deutsche Bank, said Taylor. The fund will shop between these and additional counterparties for derivatives trades, depending on which dealers offer the best bids on specific names, he added.
