Black Swan Specialist Eyes $1 Billion For Macro Fund

Sep 27 2011 | 1:38pm ET

"Black swan" hedge fund shop Universa Investments plans to launch a macro fund to profit from what it sees as mispriced options.

The Santa Monica, Calif.-based firm hopes to raise $1 billion for the new fund. Like Universa's other hedge funds, the Convex Macro Fund will be a convexity fund, seeking out trades with the potential for huge profits with minimal risk, Bloomberg News reports.

That strategy has helped the $6 billion firm's inflation funds soar 20% this month—and 35% this year. Universa bought up put options on gold—at prices that founder Mark Spitznagel told Bloomberg were "ridiculously low"—to profit from the recent drop in gold prices.

The Macro Fund will use the best ideas generated by Universa's investment partnerships, which seek out tail risks. It will invest primarily in index options, but will also put money into commodities, currencies, equities and other investments.

Universa is targeting both existing and potentially new investors for the Macro fund.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...