CME Takes Stake in Dow Indexes; Appoints Executives
Futures and other derivative markets operator CME Group announced changes in the management team after agreeing to take a 90% interest in a joint venture that will own the Dow Jones Indexes, including the Dow Industrial Average.
CME chief operating officer Bryan Durkin will be responsible for the products and services division in addition to his current role. Rick Redding, who previously led products and services, will work on the new index business.
Kendal Vroman was named managing director for commodity products, over-the-counter services and information products and Scot Warren promoted to managing director, equity index products and index services. Several other executives will have greater responsibilities.
Regarding the joint venture with Dow Jones, CME Group executive chairman Terry Duffy said this will further diversify the company’s revenue streams.
"Joining the resources and expertise of one of the world's leading marketplaces for equity index derivatives trading with a premier index provider is an exciting next step that will allow us to expand our index and market data offerings as well as to fuel growth opportunities in our equity index complex," he said.
The venture will own about 130,000 index products.
January Hits Quants; Favors Macro
Global macro was one of the top performing sectors during the first month of 2010, while systematic managed futures was the worst performer, according to Credit Suisse/Tremont Hedge Index data. Hedge funds overall were almost flat, with a gain of less than 0.2%. Global macro returned 1.1%, the third highest return for January after event-driven and fixed income arbitrage.
Credit Suisse/Tremont says global macro returns were widely dispersed. Reversals in many markets caused losses and many quantitative model-driven global macro funds continued to suffer. But portfolio hedges and contrarian exposures limited the downside, discretionary managers took advantage of interest rate changes and some fundamentally-driven models performed well. Funds that had the cash to be opportunistic were among the most successful.
Managed futures lost 3.81% in January. Trend followers posted negative returns as some of the longer-term trends reversed. The sharp reversal in equity indexes in the second half of the month caused losses, as did declines in commodities. High-frequency managers had mixed results as some were able to change their exposure in time when markets reversed while others moved too late. But long-volatility models did well, Credit Suisse/Tremont analysts found.
Guggenheim Buys Security Benefit
Guggenheim Partners LLC, an investment manager with $100 billion in traditional and alternative strategies, acquired Security Benefit Corp., the parent company of Rydex/SGI, manager of futures and commodities mutual funds—see Founders. Besides its investment arm, Security Benefit has businesses that provide annuities, retirement plan services and administrative services for insurance and financial assets.
Guggenheim and affiliated parties will invest approximately $400 million in Security Benefit. Other terms were not disclosed.
Man Taps Gottex Executive
Man Investments, part of London-listed alternatives company Man Group, hired George Yepes to head North American sales. He was previously at hedge fund of funds firm Gottex, where he headed North American distribution and client services since 2004.
He will be based in Man’s New York office and report to Martin Keller, who is responsible for institutional clients. Mr. Keller says that in the current environment investors want deeper partnerships and more transparency with their asset managers than they have before and Mr. Yepes has the experience and knowledge to develop close partnerships.
Man Investments creates portfolios of outside managers for Man Group’s products, which typically also contain allocations to AHL, the managed futures program. Total assets under management as of the end of 2009 was $42.4 billion.
Unigestion Manager and Former CTA Joins Eurofin
Eurofin Capital hired hedge fund specialist and former commodity trading advisor Laurent Chevallier as head of alternatives research and portfolio management. He will work with the firm’s chief investment officer, James Edwards, and also develop new absolute return strategies.
Mr. Chevallier was executive director and head of manager selection and investments at Unigestion in Geneva, where he was in charge of a team managing $3.5 billion in hedge fund portfolios. Earlier in his career, he co-founded a systematic CTA management firm, Quest Partners in New York, where he was a managing director from 2001 to 2004.
Eurofin Capital, the asset management arm of Swiss-based Eurofin Group, is led by chief executive Vincent Kuhn and manages strategies in a variety of asset classes including commodities.
Former Macquarie and Fimat Managers Launch Commodity Funds
Nautical Capital Management LLC, an asset manager in Purchase, New York, started to offer commodity-based absolute return strategies. The recently formed firm has both systematic and discretionary strategies and enhanced index products. It started to manage outside money in December.
Chief investment officer Ryan Carrier was previously director of commodity investor products at Macquarie Bank’s New York office. He helped create commodity products, design the Macquarie and Rogers Agriculture Index launched in 2008 and develop Macquarie's commodity products over-the-counter trading business with hedge funds.
Nautical president David Henritze was senior vice president and director of marketing for the derivative products group at Fimat USA, a subsidiary of Société Générale. He says Nautical’s robust product suite allows institutional investors one-stop shopping if they are interested in investing in this asset class.
Mr. Carrier says the absolute return strategies are positioned to benefit from specific and liquid inefficiencies in the marketplace, which can translate into great opportunities.
Separately, Nautical has secured a $20 million commitment to launch two exchange-traded funds, scheduled for the second quarter of 2010, that will systematically trade crude oil and natural gas.
Lighthouse Partners with Brighton House for Cap Intro
As part of the joint effort, Lighthouse Prime announced a capital introduction event in March where 20 up-and-coming managers will present their strategies and insights to a group of family offices, fund of funds and institutional investors. After this Scottsdale, Arizona, meeting, there are cap intro events planned in Napa Valley, New York and Palm Beach.
Steven Simmons, head of prime services sales at Lighthouse, says several clients received allocations last year and the new relationship with Brighton House will enhance capital raising success while reducing the cost.