Saturday, 26 July 2014
Last updated 14 hours ago
Mar 14 2007 | 12:25pm ET
For the past few years, Sjo Inc. alumni Irwin Berger and Stig Ostgaard have surrounded themselves with more technology, people and products than they were accustomed to in their previous careers. The former two-man show hooked up with prop trading firm Last Atlantis Capital in late 2005 to form Last Atlantis Capital Management and, since inception have introduced a slew of futures and hedge fund products. So far, the joint venture has proven a success for both sides.
A Class of 12…And Counting
Since launch in December 2005, Last Atlantis has been on a tear, rolling out 12 new strategies, which the firm folds into individual share classes, ranging from split-strike conversion to macro discretionary and trend-following commodities. External managers handle some of the share classes, while others have teams of traders overseeing them. The firm currently manages $400 million in assets.
Berger and Ostgaard manage the LACM Trend Following Commodities Share Class G-1, which trades approximately 16 futures markets. Ostgaard, an original Turtle trader, is also currently researching longer-term, volatility-type, trend-following systems to add to the firm’s product mix.
Currently, investors can cherrypick their desired onshore share classes through a Delaware-domiciled limited-liability corporation and offshore share classes through a British Virgin Islands-domiciled administrator. However, the firm is looking to streamline this process through a master-feeder fund set to be launched in this month.
Berger and Ostgaard’s Sjo returned 31% from 1991 to 1998, according to public databases. At its height, Sjo managed some $350 million.
“It was a very good product for a while because a lot of people did not have exposure to those markets,” recalls Ostgaard. “But when the foreign financials did not trend as well in the late 1990s, the program started doing poorly and we had a lot of withdrawals”
Finding Last Atlantis
As Sjo was winding down, Ostgaard and Berger—a former marketing professor at Northern Illinois University—contacted Last Atlantis through one of the latter’s students. “One of my former student’s brother was involved in options trading and they got into prop trading and became quite successful,” Berger said. “A couple of years ago, I came back to visit them and we talked about launching something beyond prop trading and into a customer business.”
“This would be a true hedge fund with many different trading strategies and not being tied to one strategy and living and dying by that strategy, which was something Stig and I realized would be a good thing to do for the future.”
Currently Berger is involved in the firm’s day-to-day operation and risk management as well as in some of the trading strategies while Ostgaard focuses on research and development of futures trading strategies.
The firm, which will introduce a real estate share class later on this year, is also researching spread-trading strategies in commodities. “One program has commodities only and the other one is broader-based with some financial instruments in it as well,” says Berger. “The idea behind this is sometimes the commodities are the ones that move and sometimes it is the financial markets.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…