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Alternative Market Briefing

Gresham evolves - the long-only firm launches new hedged strategies

Monday, April 02, 2018

Bailey McCann, Opalesque New York for New Managers:

After years as a long-only commodities shop, Gresham Investment Management is changing its perspective. In addition to Gresham's well-known commodities programs, J Scott Kerson, Gresham's head of systematic strategies has developed new long/short programs designed to take advantage of idiosyncratic parts of the commodities market.

"We spent a lot of time going through our history and also looking ahead at what might be accretive to our existing platform," says Douglas Hepworth, executive vice president, COO, and CRO at Gresham. "This undertaking essentially involved building a whole new software platform. But we think our investors see the value and there is a runway for future growth."

The hedged programs take two views of commodities markets. One strategy uses a factor based approach to commodities and the other is more quantitative. The quantitative program applies commodities trading algorithms to parts of the market that have less volume and aren't typically on the radar of other commodities managers. "The barriers to entry for what we are doing are very very high," Kerson says. "I feel comfortable saying we are one of the only CTAs with a singular focus on exotic commodities. It is very operationally intensive to do a strategy like this well and we have spent a lot of time on our infrastructure."

CTAs as a cat......................

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