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Kirsten Bischoff, Opalesque New York: Adobe Capital Partners, based in San Jose, California and run by partners George Chacko, PhD and Justin Lent launched the AdobeCap Gamma Fund in November 2007. The Gamma Fund seeks to apply insurance company strategies on financial risk through S&P 500 equity index options. With a 6 month track record of +9.02% and posted April 2008 returns of +1.75%, the Fund launches to outside investors on June 1 and has approximately $30m in future capital commitments.

Chacko told Opalesque, “Philosophically I do not believe in the concept of alpha. I believe that you take a risk and you earn fair rates of return for the risks that you take. The hedge fund business is about delivering focused risk to investors that want that specific slice of risk for their larger portfolio…for the risk we are taking we concentrate on earning a fair rate of return.”

The team points out that aside from a fundamental philosophical difference to most quant firms, they also use their proprietary models to better hedge their positions. “That hedging ability allows us to lever the capital that we bring in more, and run the entire portfolio more efficiently.” The Fund currently focuses on the S&P 500 index, but the Adobe team expects to also launch the strategy through multiple funds targeting the European and Asian markets.

Chacko is a former Harvard Business School professor, whose entrepreneurial streak......................

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