Titan Capital Preps New, More Aggressive Share Classes

May 18 2007 | 10:27am ET

New York-based Titan Capital Group is going on the offense. Next month, the firm, which has $200 million is assets under management, is launching separate share classes that will allow investors to participate in its relative value volatility arbitrage strategies. Currently, access is available only through one of Titan’s defensive volatility arbitrage funds. 

Through April, Titan’s global relative value and U.S. relative value strategies are up 5.88% and 3%, respectively. Last year, the Global RV and U.S. RV strategies generated 14% and 13%, respectively.

Marc Abrams, head of marketing, says that after four years of investor inquiries, the firm made the decision to open the relative value strategies to direct investments.

“We are confident based on the historical performance that the new relative value products should be able to produce absolute returns in the neighborhood of 12-18% per annum with no correlation to any other hedge fund strategies or markets,” says Abrams. 

Titan’s strategy is non-directional and goes long and short options on the same underlying names, taking advantage of directional investors who trade options without regard for the volatility component.

Abrams said the new products differ from Titan’s existing defensive funds in that they should produce strong returns in most markets, whereas the defensive funds are produce average returns in normal markets and outperform during difficult environments.

“However, the defensive funds will underperform during very favorable market environments,” he adds.

The new share classes, Titan US RV and Titan Global RV, charge fees of 1.5% for management and 25% for performance, with a $1 million minimum investment requirement.

Russell Abrams, the former co-head of U.S. equity derivatives and convertible arbitrage at Merrill Lynch, founded Titan in 2001 and serves as its portfolio manager.


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