Wednesday, September 28, 2011

Black-Swan Investor Universa Seeks Cool $1 Billion for New Fund

Universa Investments, a hedge fund that aims to protect clients against market cataclysms known as black swans, is seeking $1 billion for a new macro fund that will try to capitalize on mispriced options, aa person familiar with the matter told Bloomberg, who in turn told us.

Universa, which has about $6 billion under management, will market the fund as one that specializes in convexity, the term for investments that risk little capital yet have the potential for big payoffs, said the person, who asked not to be identified because the firm is private. The Universa Convex Macro Fund will make bets primarily by purchasing options on benchmarks such as the Standard & Poor’s 500 Index, as well as individual commodities, currencies, stocks and other financial instruments, the person said.

The fund will seek to profit from macroeconomic developments by combining the best ideas from investment partnerships that the Santa Monica, California-based firm has set up to protect clients against specific types of tail risks, such as inflation and stock market declines, the person said. Rising volatility in recent months has spurred demand for macro- type investments, as well as protection against unforeseen events….

Read more at http://www.bloomberg.com/news/2011-09-27/black-swan-investor-universa-said-to-start-1-billion-macro-options-fund.html

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