N.Y. Firm Preps CTA Fund Of Funds

Jan 27 2009 | 6:25am ET

One New York investment advisory firm is looking to capture some of the dizzying returns generated by managed futures funds last year with a commodity trading advisor fund of funds.

White Plains, N.Y.-based Cozzene Asset Management is prepping its Harmony Fund 1 for launch next month to invest in a stable of 10 under-the-radar CTAs who trade in the commodity markets. The fund will have exposure to stock indexes, fixed-income, metals, energy, currencies, softs, livestock and grains.

Lewis Gelbman, principal owner of Cozzene Advisors and the fund’s portfolio manager,   said there is currently tremendous demand in the market for managed futures and commodities funds but few funds of funds specialize in the space. As a result, he said the firm wanted to give investors a one-stop shop product with exposure to the different categories of commodities “in a reasonable amount” of capital.

The managers within the Harmony Fund all don’t actively market themselves, have a decent track record, manage a reasonable amount of money and have good organizational structures, according to Gelbman.

“We’re looking to stay away from the John W. Henry and Campbell & Co. model where they’re so big and unwielding that they’re going to get killed,” said Gelbman, who hopes to get the fund of funds up and running in February with about $10 million in initial assets.

Futures managers such as Mulvaney Capital Management were lights out last year with some returning over 100%, as in the case of Mulvaney, and generally trouncing their hedge fund counterparts. Managed futures gained 13.90% in 2008, according to the Barclay CTA Index, the best annual performance for CTAs since their 21.02% return in 1990.

The fund charges a 2% management fee, no incentive fee and a $250,000 minimum investment requirement.

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