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Bill Michaelcheck Benedicte Gravrand, Opalesque Geneva: Mariner Investment Group, an alternative asset manager headquartered in New York, has been gradually increasing its ETF arbitrage trades, and is practically taking on the role of market maker as a result.
Bill Michaelcheck, founder and CIO of Mariner and Jamie Silver, managing director, explain why.
Bill Michaelcheck: We have not stopped participating in traditional credit arbitrage, but we have added ETF arbitrage in our multi-strategy products.
Opalesque:Can you give me your rationale for doing so?
Bill Michaelcheck:Well, to us, it seems that the United States' credit market has separated into two different markets that are, of course, related. One is what we would call the traditional market of bonds, high yield bonds, corporate bonds, bank loans and so forth, that we have all known forever. And then, there is the active market of ETFs, credit default swaps and index products based on these bonds.
The amount of trading volumes in these index products or fund-type products are very large. And even though they are made up of the underlying components or building blocks of classical credit, they almost behave as a separate market.
For us, as an alternative asset manager offering an array of products,we like to be involved in markets that are very active, that are moving day-to-day, so that we can find arbitrage opportunities or mispricings and so forth.
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