Cambridge Preps Asian Currency Hedge Fund

Nov 29 2007 | 7:59am ET

Asset management firm The Cambridge Strategy is prepping a currency hedge fund derived from its Asian Emerging Markets Alpha Strategy. The U.K.-based firm is planning to launch the fund on Dec. 15 with $10 million in seed capital. 

The fund will invest in all major Asian currencies and avoid illiquid currencies in countries such as Vietnam and Cambodia. Russell Thompson, the firm’s CIO, is the portfolio manager for the new offering, and Encinitas, Calif.-based Ten Asset Management is marketing the fund in the U.S.

The 19-month old strategy is managing some $30 million in separate accounts and has returned 24.33% year to date. Chairman Edward Baker, who until April was the CIO of emerging markets growth equities at AllianceBernstein, said investor demand for the strategy in a fund structure as well as regional interest prompted the launch.

“From a fundamental point of view, it’s still a growing area attracting huge investor interest,” he said, adding that the overall currency markets are inefficient and there is an opportunity to make money through active management.

“These inefficiencies are fairly short term so one has to have that kind of focus and one needs to be very systematic about this. We have an algorithmic approach for identifying signals, which has worked well for us.”

Baker noted that the fund employs both technical and fundamental strategies to the currency markets, allowing it to increase capital to each strategy as dictated by the market. The fund did this in September when it gained 8.25%.

“What we found is that in periods of rising and high volatility, we need to take money out of the fundamental strategy into the technical strategy, which performs best in a higher volatility environment, and September was just the case. We did especially well shorting the dollar and [going] long Malaysian ringgit that month.” 

The Asian Currency fund charges a 2% management fee and a 20% performance fee with a $250,000 minimum investment requirement.

Cambridge also manages the Developed Markets Alpha and Extended Markets Alpha strategies in managed accounts. All told, the firm manages $150 million across its currency strategies.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.