WESTPORT, Conn. (HedgeWorld.com)–Three former senior executives from Bank of America are set to make their mark in the world of foreign currency trading with their first hedge fund, Scalene Partners LLC.
The U.S. hedge fund takes advantage of price movements in foreign currency during the trading day in New York. The fund trades sterling, euros, the Australian dollar, the Canadian dollar, and the yen.
Scalene Partners opened in mid-May with US$2 million in partner assets. The managers of the fund are foreign exchange experts, using their backgrounds at Bank of America’s U.S. foreign exchange trading desk as the foundation for their trading strategy.
David Greenwald, partner at Scalene Capital Management described the trading methodology as, “capturing the time period of the market value equilibrium and when that equilibrium is broken is when we trade.”
Mr. Greenwald was a managing director at Bank of America and head of U.S. foreign exchange trading. At the bank, he centralized the trading in consolidating Los Angeles and San Francisco operations within the firm’s New York office. At Scalene, his focus is on building the fund’s infrastructure and enhancing its trading platform.
Ken Kristensen and Todd Andrews are also partners in the Scalene fund. Mr. Kristensen was a principal responsible for trading the bank’s U.S. dollar/deutsche mark and euro dollar book. He handles the intra-day trading methodology and its implementation. Mr. Andrews will use his experience in proprietary risk analysis at Bank of America in managing discretionary trading, idea generation and trade implementation at Scalene.
The group expects that the U.S. dollar will continue to be weak, after a decade of strength, Mr. Greenwald said. The euro will continue to have strength and longevity, he added. The Scalene fund’s strategy includes the use of four times leverage.
The fund will be marketed to individual and institutional investors, with a US$500,000 investment minimum. Fees are 2% and 20%. Depending on the success of the initial fund, Scalene plans on exporting its trading methodology, essentially following the bell curve, to other areas such as futures and stock trading.
Providers for the new fund include Julius Baer as custodian through which Dresdner and Barclays act as prime brokers. Arthur Bell is the fund’s auditor, while Swiss Financial is the fund’s administrator.