Thursday, 24 July 2014
Last updated 1 hour ago
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.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…