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Portfolio > Alternative Investments > Hedge Funds

Magnum Assists in Two Fund Launches

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MIAMI (–Magnum Global Investments invested in and is sponsoring two new hedge funds, adding to its US$300 million hedge fund lineup.

Magnum, which invested in the Zeff Capital Offshore Fund and the CM Market Neutral Fund, expects additional investors to add assets to the funds in the coming weeks. Both the strategy and management of the two funds were attractive to Magnum, according to statements from Dion Friedland, founder of Magnum.

Magnum invested US$2 million in the Zeff Capital Offshore Fund, a new long/short offshore vehicle. It has outperformed since its inception as a U.S.-based fund in July 2001, when Zeff Capital Partners was founded. Fund Manager Daniel Zeff concentrates the portfolio’s positions in 15 to 20 core holdings and a handful of shorts, diversified across a range of industries. Zeff focuses on companies that are takeover candidates, with most of the stocks falling into the small-cap value category.

Banc of America Securities is the fund’s prime broker and custodian; Genesis Fund Services is the administrator of the Bahamas-based fund and BDO Mann Judd is the fund’s auditor.

The CM Market Neutral Fund is a U.S. equity fund that invests in a balance of long and short positions. The manager of the fund, Patrick Adams, uses a combination of fundamental and technical analysis to identify stocks and sectors with likelihood of positive returns. He then pairs a position on the short side that should lag the rise of the long position in an up market and fall faster in a down market.

“Historically, market neutral hedge funds have enjoyed the lowest annualized standard deviation of any hedge fund strategy,” Mr. Friedland, said in a statement. “While annual returns of the sector have been an attractive 11.3%, inclusion of this strategy in a portfolio should significantly lower risk, while increasing risk-adjusted return.”

Also an offshore fund, the CM fund is domiciled in the Bahamas and has the same service providers as the Zeff Capital Offshore fund. Magnum jumpstarted the hedge fund with an initial US$1.5 million investment.

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