Ex-SocGen Traders Ready Dividend Futures Hedge Fund

Jul 8 2013 | 10:18am ET

A group of former Société Générale traders are planning a hedge fund to invest in dividend futures.

Paris-based Melanion Capital is believed to be among the first firms to focus on the burgeoning market, Financial News reports, which was created five years ago. That's also when the Melanion group, Jad Comair, Antoine Iskandar, Erwan Tigreat and Big Zhou, began trading them at SocGen. Comair told FN that the strategy has averaged 20% annual returns before fees since its inception.

"Dividend futures have evolved from a hedging tool to an asset class, similar to what happened to the market for credit default swaps," he said. "We think the dividend futures market has the potential to be the next big thing." Comair said that open interest for the market has grown to US$10 billion, and that Melanion's fund has a capacity of about €500 million.

Melanion, which will employ quantitative and fundamental approaches to the dividend futures market, has won authorization from French regulators.


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...