Scott Eisner, principal of Scalar Funds Management, recently launched a program to give investors their choice of using traditional S&P 500 equities or single stock futures to create customized portfolios in their personal accounts.
Eisner’s program is offered only in managed account formats and features a market neutral long/short strategy and a pure directional strategy similar to mutual funds. “What I’ve really done is develop a pricing model, which is very formulaic and systematic, and seems to work fairly well as a predictive tool,” said Eisner.
“My favorite use of the model is currently in the equity market neutral space although it works fairly well as a directional strategy, and can be applied using traditional equity or single stock futures. The latter application seems to be getting a lot of interest for various reasons.”
While Eisner admitted that the program is not for everybody, he said investors benefit from its transparency and lack of correlation to hedge fund indices. "There's nothing behind the curtain here, it's all in the sun light every day. Hedge fund indices investors can benefit from it because it has a low to negative correlation to market neutral indices. Futures investors and brokers are also likely to be particularly interested in the use of single stock futures as it opens completely new horizons for managing client portfolios,” he said.
The minimum investment requirement for the program is $250,000. Market neutral investors are charged a fee of 1/20 while directional investors are charged a 2% management fee.
Eisner is chief financial officer of proprietary trading firm Harrison Trading Group, which is not affiliated with the Scalar Funds. In 2003, Eisner was trading principal for the Kottke Long/Short Equity Value Fund, the precursor to his current strategy.