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Derivatives

Ex-Tiger Commodity Fund Foresees Electricity Trading Push

Catequil Asset Management, a New York-based multi-commodity hedge fund founded by alumni from Julian Robertson'sTiger Management, expects to become more active in trading electricity derivatives and will hire opportunistically if it finds a suitable candidate. Paul Touradji, co-founder and managing partner, said Catequil has entered financially settled electricity derivative trades on a limited basis and expects to become more active in this market in the long term as liquidity improves. "Up until two years ago, one had to be a physical player," he noted, adding that market leader Enron collapsed just as liquidity in financial instruments was taking off.

Touradji said he and co-founder Robert Ellis will continue to trade the U.S. electricity derivatives markets themselves until--and if--a suitable hire is found. He declined to expound on the qualities an ideal candidate might posses.

The fund, which has some $1 billion in assets under management, is named after the Inca god of lightening and thunder. Catequil is part of a small but growing band of hedge funds trading electricity derivatives. D.E. Shaw, Susquehanna International Group and Citadel Investment Group recently jumped into the market.

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