Platinum Launches Fixed Income Arbitrage Fund

Platinum Capital Management has launched a hedge fund that focuses on producing consistent absolute returns and very low volatility in all market conditions. The Premier Fund will invest in Long Short in UK, US, and EU government securities with a

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Platinum Capital Management has launched a hedge fund that focuses on producing consistent absolute returns and very low volatility in all market conditions. The Premier Fund will invest in Long/Short in UK, US, and EU government securities with a short-term interest rate arbitrage overlay to hedge and enhance returns.

Premier’s overlay strategy will seek to exploit intra-day distortions in the yield-curve in UK, US and EU sovereign debt. This strategy is similar to the trading undertaken by fixed income market-makers in banks -in effect, says Platinum, “Premier’s proprietary traders get the benefits of a market-maker without the corresponding obligations.” The firm says the strategy has proved successful for the underlying manager. In the 4 1/3 yrs from Feb 2000 to end-May 2004, Premier’s underlying manager recorded no losing months and a consistent gains totalling more than 116%.

“Platinum Premier has all the makings of an exceptional fund,” says Peter Sprecher, Chairman, Platinum Capital Management. “We strongly believe this consistent, low volatility strategy should prove compelling for all types of investor particularly now there is a recognition that funds with a low or zero correlation to equities key investments in the current economic climate.”

Of the underlying manager, Craig Reeves, Managing Director, Platinum Capital Management states: ‘ We have had a professional relationship with Premiere’s underlying manager for over 8 years and we have been profitably investing our own and our clients’ money with the manager for nearly five years, achieving extremely superior returns.’

Platinum Premier is constructed to aim at returns of 10%-18% per annum net of fees (and consistent with the underlying manager’s track record). The Fund combines low correlation to the equity markets with low volatility and low risk creating a structure able to side step poor performance and build stability. The strategy has produced consistent returns in all market conditions, as returns are not dependent on rises or falls in the equity or fixed income markets.

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