Ex-MF Global Exec. Readies Quant. Volatility Hedge Fund

Sep 19 2012 | 1:59pm ET

Daniel Bystrom has been mulling a hedge fund launch for five years. But it took his employer's collapse to make him take the plunge.

Bystrom, formerly head of equity derivatives trading at MF Global, and his partner, Neil Boyarsky, will launch a quantitative volatility hedge fund by the end of the month, with between $10 million and $20 million in initial capital from themselves, their families and friends. But it might not have happened were it not for MF Global's bankruptcy in October.

"It was an ongoing dialogue and it was something I knew I would always do at some point," Bystrom, whose résumé also boasts stints at AM Investment Partners, Merrill Lynch, BNP Paribas and Susquehanna International Group, told Bloomberg News. "When MF Global did go bankrupt, it presented me with the right opportunity to do it."

New York-based Hawksfield Capital's maiden Volatility Opportunities Fund will use quantitative models to analyze volatility and value options, it said in a marketing presentation. "The fund will deliver returns that are uncorrelated and often negatively correlated to the returns of the typical hedge-fund strategy," Bystrom said. "The opportunity set expands dramatically in times of higher volatility, when most other asset classes are not performing well."

Bystrom will serve as chief investment officer of the new firm, with Boyarsky, formerly executive vice president of actuarial consultancy Improved Funding Techniques, as CEO.

Goldman Sachs has been engaged as Hawksfield's prime broker.

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