A Five Grand Hedge Fund (revised story)

Quadriga Investment Group, a hedge fund and managed futures fund firm based in Vienna, Austria, recently received Securities and Exchange Commission approval to launch a hedge fund in the United States that has a minimum investment of only $5,000. Yes, $5,000.

The fund, called the Quadriga Superfund, is registered under the Securities Act of 1933. The Superfund is a security “wrapped around [Quadriga's] managed futures fund applying hedge fund strategies,” says Guenter Mathis, Quadriga’s chief operating officer who works in the company’s New York office. The Quadriga Superfund is a single-manager fund offering two investment choices, Series A and Series B, both of which are modeled on the strategies used in Quadriga’s offshore funds. Series A is a more moderate fund that follows the performance/risk ratio of the company’s flagship fund, the Quadriga AG. In the last five years, the fund has returned 34.75% net of fees annually, according to Quadriga. Series B mimics the Quadriga GCT US$ fund, a more risky fund offering potentially higher returns. Since its inception in January 2000, the Quadriga GCT has seen average annual returns of 57.55% net of fees.

Series B invests in a broad diversified portfolio, Mathis says, with “50% of our investment (and that’s true for Series A and B) in so-called financial futures, i.e., currencies, bonds, interest rates and stock indices like the Dow Jones; we also invest on a global basis.” The other 50%, he says, is invested in commodities like coffee, sugar, and cocoa. “The beautiful thing about [Series B] is when markets are going down–and let’s assume there will be a credit crunch like most people are assuming, including myself–we will see interest rates go up and commodities will go way up.”