MST Capital Pty, run by Sydney-based former UBS AG (UBSN) trader Gerard Satur, raised A$10 million ($9.1 million) from wealthy investors for a global macro strategy that will start today.
The strategy, Baruch Global Macro Fund, will shadow the strategy used for its existing fund that invests in foreign exchange, equities, credit markets, interest rates and commodities, with a focus on the Asia-Pacific region, said Mark Levinson, a partner at the fund manager. MST expects to add as much as an additional A$10 million from Aug. 1, he said, declining to name the investors.
MST, which manages A$175 million with most of their clients being institutional investors, is widening their client base as Australian investors search for higher-yielding assets with the central bank lowering its benchmark interest rate to a record-low 2.75 percent and a slowing economy hurting equity valuations. The company’s existing hedge fund has returned 6.5 percent after fees in the last nine months and targets an annual return of 10-15 percent, Levinson said.
“The retail landscape is very complicated and people who do it well, do it with an army of people reaching out to financial planners,” Levinson said in an interview in Sydney on June 27. “We don’t have an army. We have chosen to work with certain high net worth individuals that can reach into their network and who understand what we are doing.”
Satur, the former head of macro strategic trading at UBS in Sydney, left the Zurich-based lender in March 2012 as investment banks scaled back proprietary trading to comply with new regulations that curb risk taking in the aftermath of the worst financial crisis since the 1930s.
MST’s return compares with a 0.19 percent increase for the HFRI Macro (Total) Index in the nine months through May. The index measures the performance of funds with a broad range of strategies based on economic fundamentals.
The hedge-fund manager is positioned for U.S. dollar strength against the British pound, Japanese yen and euro, Levinson said. It also has short positions in the Australian dollar and prefers Australian bonds versus U.S. bonds, he said.
The U.S. currency climbed to a more than two-week high against the yen on June 28. The U.S. dollar was also the best performer among the currencies of the Group of 10 most developed nations this year.
MST is waiting for clarity on U.S. monetary stimulus before taking bigger calls, Levinson said. U.S. Federal Reserve Chairman Ben S. Bernanke on June 19 said the Fed may slow the pace of its bond-buying program later this year and end it entirely around mid-2014 if the economy gets on a path of sustainable growth.
Unlike many macro fund managers that screen investments with computer models, MST relies on the judgment of its investment team, Levinson said in December. It employs seven investment professionals, according to the firm’s website.
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