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Rydex Hires Hedge Fund Industry Veteran, Considers

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NEW YORK (–The alternative investments unit of mutual fund firm Rydex Global Advisers tapped former HedgeWorld managing director Jeff Joseph to help introduce Sphinx Fund and to work on product development.

Sphinx Fund is a hedge fund index vehicle recently approved by the Securities and Exchange Commission. “This product is the most effective and economical way of delivering absolute returns because it is on the lower end of the fee curve,” said Mr. Joseph. “It is very investor friendly,” Previous HedgeWorld Story.

Besides being a portfolio solution for investors, Sphinx is also a solution for registered investment advisers, who need to offer products other than widely available long-only funds, Mr. Joseph said. Having worked as a registered investment adviser himself, he sees Sphinx as a way RIAs can expand their business.

Before joining HedgeWorld, Mr. Joseph was co-managing director at Hedge Fund Research, and prior to that, he founded an advisory business, Natomas Capital Management, which later merged with Essex LLC.

Rydex Chief Investment Officer Michael Byrum emphasized Mr. Joseph’s dual experience in hedge funds and as an RIA. “His combination of perspectives can help put us in the shoes of our clients,” he said. Rydex is conducting forums for advisers, and Mr. Joseph is expected to work on this hedge fund-related educational effort.

Sphinx is based on Standard & Poor’s hedge fund index, which rests on nine strategies. A possible future line of new product development for S&P and Rydex would be to construct single-strategy index funds. That would be a natural evolution but nothing has been planned yet, said Rydex portfolio director Chuck Tennes.

Investors are becoming more sophisticated, Messrs. Byrum and Tennes suggested. In the next couple of years, investors will embrace risk management and asset allocation concepts, argued Mr. Tennes. “Sphinx and other Rydex funds provide tools for that,” he said.

Rydex Chairman Albert (Skip) P. Viragh, Jr. noted that the company is the ninth fastest-growing mutual fund business in the United States. It specializes in index funds and non-traditional mutual funds, such as leveraged and short-only vehicles. Total assets under management are at US$8.5 billion.

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