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Derivatives

U.S. Macro Hedge Fund Considers Structured Products

Nascent hedge fund manager RoundRock Partners envisages entering into various derivatives and structured trades in its multi-strategy fund, dubbed AquaFund, scheduled for launch Sept. 1.

Nascent hedge fund manager RoundRock Partners envisages entering into various derivatives and structured trades in its multi-strategy fund, dubbed AquaFund, scheduled for launch Sept. 1. Scott Kimball, senior managing director and head trader in Atlanta, noted that the fund has a flexible investment mandate and will enter a variety of trades providing it can mark them to market at the end of each month. RoundRock will consider purchasing structured products such as equity or currency-linked notes or basket trades in several asset classes, he said. These may include principal-protected structures as a means of stabilizing the volatility of the fund. Option overlays and options on futures contracts, will also be considered.

Bear Stearns is the fund's prime broker. Kimball left Bear Stearns' Investment Banking Private Services division along with several colleagues this summer to found RoundRock. The fund manager has relationships with several firms to act as counterparties for derivatives and structured products trades and will shop between these according to relationship, price and the capacity of counterparties to add value to specific trades, he said. RoundRock anticipates reaching USD1 billion in assets within 18-24 months of launch.

 

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