SINGAPORE, March 14 (Reuters) - Man Group is expected to launch a computer-driven fund to invest in commodities, as part of a push by the world’s second largest hedge fund manager to develop a range of new quantitative trading products, the Financial Times reported on Wednesday.
The fund, which will be led by the former Ospraie Management and Amaranth trader Scott Kerson, will be included in Man’s one-year old Systematic Strategies unit (MSS) and will have a capacity for up to $5 billion of client money.
MSS head Sandy Rattray saw huge opportunities for new active managers in commodity investing, which is currently dominated by passive funds, the FT said.
The Man Commodities Fund, which has begun trading with a $50 million seed investment from the group, would aim to use “hedge fund techniques, but in a long only product,” that was run by proprietary algorithms that the firm has been working on for the past 18 months, Rattray was quoted by the FT as saying.
The fund will aim to minimise drawdowns in commodity markets by spotting and responding to potential volatile price movements before they dent the portfolio.
If the fund is successful, MSS may consider launching other commodity-focused funds, such as a full-blown systematic commodities hedge fund, the newspaper said.