36 South Moves Most Assets Into Volatility Investments

Sep 17 2013 | 2:04pm ET

36 South Capital Advisors is living up to its reputation as a volatility hedge fund.

The London-based firm has nearly doubled its volatility bets this year, and now has 90% of its US$626 million in assets in volatility plays on currencies, commodities and stocks, Bloomberg News reports. The firm is guessing that the longer quantitative easing goes on, the more spectacular market gyrations will be later.

"The central banks have been flooding the world with liquidity, which in a way confuses the pricing mechanism," 36 South founder Jerry Haworth said. "We got the feeling that the longer that it carries on, the subsequent volatility that will happen afterwards will be greater."

36 South's flagship Kohinoor volatility funds are down 2% this year.

"You buy a ticket to a life raft well before everyone else is clambering to get on," Haworth told Bloomberg. "When you have an opportunity to get a cheap ticket, you should buy it."

But that time is coming, Haworth said, noting that the small redemptions his firm saw last month are a possible harbinger.

"In a way, I've been looking forward to redemptions because they tell me that it's probably the last thing that happens before it turns."


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of