ARX Offers Offshore Long/Short Class

Feb 1 2007 | 11:42am ET

Rio de Janeiro, Brazil-based ARX Capital Management has launched a Cayman Islands-based long/short class within its ARX Brazil Fund SPC.
The fund’s focus is on Brazilian equities, but is not limited to the region. Its strategy includes purchasing preferred shares and selling common shares of the same company, betting that the discount between the two will narrow.

“This is a distortion that happens a lot in Brazil,” said Pedro Sauer, who works on the firm’s trading desk. “We’ll also purchase and sell companies within the same sector to capture the alpha, while guarding against corrections within the sector.”

The fund is currently long in energies, banks and steel companies and is short on pulp and paper, and telecom mobile concerns. Its pair trades involve energies, steel and mining concerns, according to Sauer.

The new fund charges a 1.5% management fee and 20% performance fee, with a $100,000 minimum investment requirement.

ARX is also planning a launch of an equity long-only fund in second half of 2007, according to Sauer.

In other ARX news, the firm’s offshore multi-strategy class launched, which launched in July 2006, was up 11.47% in its first six months of trading. Its gains were made in inflation-linked bonds, equities and pair trades as well as in foreign exchange and commodities, according to Sauer.

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