NEW YORK (HedgeWorld.com)–Refco Alternative Investments LLC and Abbey Capital Ltd. together will develop and market several multi-manager managed futures funds for institutional investors, officials at both companies said Thursday.
The two firms will work together to build managed futures funds of funds that combine investments in various markets and that use different strategies in order to offer better diversification and performance.
Abbey Capital, Dublin, Ireland, will select the managers for the multi-manager portfolios and perform risk management. An independent administrator will price the funds daily. Refco Alternative Investments will distribute the funds to institutional investors.
Officials at Refco Alternative Investments and Abbey Capital did not discuss the pricing structure of the new funds, other than to say it would be “very competitive.”
In a statement, Refco Alternative Investments President David Henritze said managed futures provide good diversification because they are not correlated, or even negatively correlated, to long-only equity and fixed-income investments. Institutional investors, however, tend not to use them as often as they perhaps should, he said.
Tony Gannon, founder and chief executive officer of Abbey Capital, agreed. “When added to a traditional portfolio, managed futures may smooth out volatility and may improve performance on a risk-adjusted basis.”
Refco Alternative Investments offers managed futures, hedge funds and structured products on behalf of its parent, Refco Group Ltd. LLC, New York. Abbey Capital is a multi-manager firm that specializes in managed futures funds.