10/31/2012

Investors Get Behind Ex-Alphadyne Partner

A former Alphadyne Asset Management executive is leading a new global-macro firm that launched its debut fund last month.

Arcem Capital began investing on Sept 1. with $100 million, and it is telling investors that it expects another $100 million before yearend.

The New York firm is led by chief investment officer Chris Leonard, who previously was a partner at Alphadyne, a $1.9 billion global-macro manager that largely focuses on relative-value and directional trading in interest rates and currencies. Arcem looks to be taking a similar tack via its Cayman Islands-domiciled Arcem Master Fund.

Leonard spent seven years at Alphadyne and, before that, was a managing director at J.P. Morgan. There are two other former J.P. Morgan executives on board at Arcem: chief risk officer Venu Angara and director of operations Luis Ontaneda, who spent the past five years at UBS. Other employees include investment strategist and trader Muraari Vasudevan, who previously worked at Morgan Stanley and SimuTech Group, and a trading programmer, Troy Gleason, whose previous employers include Credit Suisse and BlueMountain Capital.

Both Leonard and Angara have more than 15 years experience in fixed-income markets, and they claim to have a track record of preserving capital over the last five years.

The fund will use fundamental analysis but also will employ quantitative methods to screen for investment opportunities. The vehicle, which invests globally, is designed to profit in all market conditions.

Investors who commit in the months following the launch will pay a 1.4% management fee, while subsequent investors will be charged 2%. All limited partners will pay a 20% performance fee.

Arcemís launch comes at a time when many global-macro funds have been having a difficult time navigating markets amid reduced liquidity and government intervention thatís flummoxed even the most seasoned traders. Perhaps most notably, Louis Baconís Moore Capital told investors on July 31 that it would return $2 billion from its $8 billion flagship Moore Global Investment Fund because of limited investment opportunities and reduced liquidity. Through July, the fund was up just 1.6%, although it was up 4.8% through Oct. 11.

Alphadyne Investment Strategies Fund, which at $213 million is one of the firmís smaller vehicles, was up 5.2% through Oct. 19. Since its launch in 2007, the fund has delivered an 8.8% average annual return, according to HSBC.

Both the Moore and Alphadyne funds are doing better than most of their peers. The HFRI Macro Index was up just 0.7% through Sept. 30, with a 1.1% loss over the prior 12 months.

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