CHICAGO (HedgeWorld.com)–The first joint venture for futures and options broker Peregrine Financial Group Inc. and commodity trading adviser Trader Source Inc. will be a multi-manager offshore hedge fund aimed at both institutional and retail markets.

The two firms also plan a competition that will help identify and develop emerging CTAs.

The new BVI-domiciled Secret Harbor Multi-Manager Fund Ltd. is expected to launch April 1. The fund will allocate its assets to CTAs and interbank traders and target returns of 15% to 20% a year with no correlation to hedge funds or domestic equity markets.

“The CTA world has been largely neglected by major institutions, which have focused their sights on the large hedge fund class without recognizing that many of the premier closed hedge funds started out as CTAs,” said David Welch, president and chief executive of TraderSource. “The strategic alliance with PFG should help fill this void.”

At the same time, Peregrine announced that it is sponsoring CTA Challenge ’03, a contest that it hopes will help identify emerging talent. An “emerging CTA” eligible for the contest is one with less than US$1 million in assets under management. Beginning in April and continuing through the fall, CTAs will trade their own strategies. The winner of the contest will receive US$1 million allocation from the PFG/TSA alliance.

Peregrine’s President Neil J. Aslin said in a statement that he is pleased with how the competition fits with the new alliance and with Peregrine’s long-term goal to become more involved in the managed money market.

CFaille@HedgeWorld.com