Qbasis gets $200 million-plus investment in 'black swan' hedge fund
By Nishant Kumar
LONDON (Reuters) - A hedge fund that more than doubled clients' money during the 2008 financial crisis has attracted more than $200 million from an investor aiming to cash in on fresh ructions in global markets.
Qbasis Invest has secured the investment from Britain's Omada Capital, Florian Wagner, who founded Qbasis in 2005, told Reuters. Because it is such a sizeable sum, Omada will receive an undisclosed equity stake in Qbasis, he added.
Based in Austria, Qbasis currently manages $220 million (140 million pounds) and specialises in profiting from market dislocations, as described in the "black swan" theory of Lebanese-American academic Nassim Nicholas Taleb.
Volatile stock markets, rising geopolitical risks, a potential Greek debt default and the prospect of sudden interest rate hikes in the United States and elsewhere have stoked fears that global financial markets are ripe for more sharp falls.
Investors such as Omada, a London-based private wealth manager, are increasingly looking for ways to protect their portfolios from market shocks.
With nearly three quarters of Europe's hedge funds less than $200 million in size, according to industry tracker Eurekahedge, the new investment is a big boost for Qbasis. It takes Qbasis' assets near the $500 million mark, which makes it eligible to receive investments from institutions focussed on larger funds.
"For us, it's a perfect situation," Wagner said.
"This year is the first year when really everybody on this planet has to think about how to get a stability effect into their portfolio," he added, referring to the need to hedge in case of market flux.
Omada Capital will invest the money over the next 18 months.
Qbasis uses mathematical models to evaluate risk, pricing and timing in financial markets, unlike those following fundamental analysis that largely depends on subjective calls.
It bets on rising volatility and trends in commodities, interest rates, stock indices and currencies.
The fund loses money when market volatility falls. However, it is designed to earn out-sized returns during turmoil in the market and when most other securities suffer.
The Qbasis i Trend fund strategy returned 23 percent in September 2008 and 48 percent the next month as Lehman Brothers filed for bankruptcy and triggered a broader market panic. It ended the year up 157 percent when the S&P 500 Index <.SPX> plunged 38.5 percent.
Last year, the fund gained 42 percent primarily by betting on commodities markets and a plunge in oil prices. Similar trend-following hedge funds returned 9 percent on average, data from Eurekahedge showed.
Omada did not immediately respond to requests for comment.
(Editing by Sinead Cruise and Mark Potter)
