The Tuono Corp. is slated to open its domestic fund to investors on Monday, following a more than six-month delay caused by legislative red tape and filing requirements. The T-Circle Partners Fund will be a hybrid managed account product that will invest in derivatives, currencies and other aggregated baskets of quantitative-driven investments.
The fund will have a strategy similar to the company’s offshore fund, Tuono Circle Ltd., however it will be layered with a quantitative style to reduce volatility.
“We talked to a number of international banks who looked at the style of our offshore option and said its volatility was about 300 basis points above what they’d like to see,” said Michael Billy, ceo of the Naples, Fla.-based firm.
For the domestic fund, the volatility has been reduced from roughly 8% to 3%. This will alter the return on investment slightly. For instance, the year-to-date return on the “pure Tuono strategy” is 25.85%. The addition of the quantitative strategy limiting the volatility would put the return at 21.86%.
The fund will have two series, labeled Class A and Class B, allowing investors to choose between a mixed strategy of the pure Tuono style with a quanti-
tative overlay or a synthetic in-
vestment style layered with the quantitative style. The overall cap
of the combined funds will be
The fund will be open to ultra-high net worth investors as well as institutions and will carry a $1 million minimum investment and a one-year lock-up period. It will not charge redemption fees but it will have a 2% management fee and a performance fee of up to 35%.