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Alternative Market Briefing

BlackCat Capital offers welcome green shoot in managed futures sector

Tuesday, January 18, 2011

By Beverly Chandler, Opalesque London

A welcome green shoot of recovery in the CTA community lies at the heart of the January launch of BlackCat Capital Partners in London. Matt Breakwell, John Reeve and Wei Xia are chief operating officer, head of trading and head of investment research and risk management for the US$ 5m technology led futures fund. In an interview with Opalesque, the team explained that they lean more towards financial futures, trading globally over 21 markets.

Breakwell and Reeve originally met up in 2005 and discussed building an investment business. The pair started trading proprietary capital in October 2008 and Xia joined them in 2009. BlackCat became authorised as an investment manager in November 2010 and ended proprietary trading operations with over US$ 3m of partnership capital.

In their two years and one month of prop trading they achieved a monthly compounded annual gross return of 68.66% on a daily volatility of 1% and a Sharpe ratio of 3.1. In that two year period, their only negative months came in March '09, when return was 2.58% down and May '09, when it dropped by 8.10%.

Reeve describes their technology led system as 'the fruits of his labour' for over 10 years. Reeve had been prop trading on his own for about six years before meeting Breakwell. "We are trying to capitalise more on our technology" says Reeve. "We have developed a comprehensive set of software tools and infrastructure and so wanted to expand." Reev......................

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