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Investcorp-Tages has launched a $115m systematic short-term Ucits fund with Eckhardt Trading Company, seeded by Quilter Investors.
It is the first Ucits product launch since Investcorp and Tages announced a $6bn joint-venture deal in May and said they were eyeing three to four seed deals in the next year.
It brings the number of funds on the Investcorp-Tages Ucits platform to three. Others include the Anavon Global Equity Long/Short Fund and the Tages Paladin Tail Hedge.
Last month, Investcorp-Tages acted as an anchor investor in helping former Brahman Capital partner Joshua Pearl launch a TMT fund called Hickory Lane Capital.
The Eckhardt Ucits launched with $115m at a time when short term CTAs, which typically have holding periods of 10 days or less, have pulled ahead of their longer-term counterparts as market volatility has spiked from the US elections and the continuing Covid crisis.
“We believe that this solution offers the right characteristics at the right time by combining a unique volatility-based signal generation system with a risk-first approach to trade implementation, serving both as a potential diversifier to traditional trend and breakout managers and as a standalone systematic alpha generator with a low correlation to equity markets,” Rob Sorrentino, president and COO at Eckhardt Trading Company said.
Chicago-based Eckhardt was founded by Bill Eckhardt in 1991 as a laboratory for futures trading research and the development of systematic strategies open to external investors.
Eckhardt himself later became known in the managed futures industry as one of the creators of the turtle traders, a class of novices who were taught to become successful CTAs through a rules-based trading system.
Eckhardt Trading Company started out as a short-term to medium- term trend-following manager and introduced its first short-term counter-trend systems in 2012, designed to capture profits when trends collapse.
The offshore version of the flagship Eckhardt Futures fund was up 11.1% this year through September, according to HFM data.
The Ucits fund, which has an average holding period of less than 10 days, incorporates new systems that target alpha before trends or break-out moves become discernible, providing what the manager believes to be a level of portfolio protection during periods of extreme volatility and exhibiting strong “all-weather” characteristics.
The Investcorp-Tages venture has offices in New York, London and Milan.
ETC won Best Diversified CTA under $500 million.
Bill Eckhardt and Richard Dennis were joint recipients of the 2016 Managed Futures Pinnacle Achievement Award given by CME Group and Barclay Hedge.
ETC introduced its first pooled investment fund (Eckhardt Futures LP) in 1993 to offer high net worth individuals, endowments, and institutions the opportunity to access our trading strategies in the same fund as ETC’s founders and principals. ETC formed a Cayman fund in 2001 to provide the same services to non-US investors. Our research, trading strategies, and infrastructure have undergone continuous evolution since the founding. ETC was a short-term to medium term trend-following manager in the early days; now non-trend strategies work along-side trend-following, orders are executed algorithmically, and the average trade duration is 9 days. Mr. Eckhardt managed client assets under his own name beginning in 1991 prior to incorporation and ETC took over the management of those accounts in June 1992.
Our approach is risk first, capture second. That means our systems evaluate the risk of the markets as the most important consideration for trade generation and portfolio positioning.
Evolution Strategies is a diversified package of quantitative, systematic trading systems that leverage a data-driven evolutionary computing process to regularly adapt and reorient to changing markets. Currently, the program’s overall average trade length is 9 days. All systems are volatility 1st and capture 2nd. The capture components include short and medium-term Vol-Trend and short-term Non-Trend:
Our portfolio of systems includes short-term trend and non-trend strategies with an average trade duration of 9 days.
Trend strategies seek to distinguish the persistent trend (signal) components of the futures price series from the transient (noise) components and allocate risk appropriately in trending markets.
Short-Term: 5 day avg.
Select Commodities seeks to distinguish the persistent trend (signal) components unique to a select basket of commodities from the transient (noise) components and allocate risk appropriately in trending markets.
Trend Neutral looks for patterns in volatility to seek short-term profit opportunities as markets reverse themselves and in markets without clearly defined trends.
Volatility Select looks for long and short side opportunities in stock indices and bonds.
*There were two optimizations in 2016