Julius Baer has established a separate product structuring and hedge fund trading division, based in...
Julius Baer has established a separate product structuring and hedge fund trading division, based in Zurich, to provide structuring and legal services for fund managers, as well as daily liquidity on all the firm's own hedge funds.
Yoshiki Ohmura, head of the four-member Alternative Risk Trading (ART) division, said ART would complement Julius Baer's private banking and asset management divisions.
The division will provide structured products around hedge funds, from protected products using CPPI, CPPI with options, and pure option-based structures, to leveraged products and coupon-paying portfolios. It can also produce off-balance sheet instruments, swaps, options and forwards based off hedge funds.
Ohmura said he had seen increased demand for leveraged products, given lower returns from some hedge fund strategies, and protected products with embedded leverage.
He added there had been a trend for banking, corporates and insurance companies that had liabilities to meet; were traditionally cash heavy and therefore exposed to interest rate fluxes; and bearish on interest rates, to buy products offering cash flows greater than Libor, and strategies not correlated to interest rates.
In terms of legal wrappers, the group has a legal expert structuring certificates, notes and other legal vehicles for distributing funds to investors.
ART will also act as a nexus for a secondary market facilitating buying and selling of investments in Julius Baer's single and multi-strategy hedge funds.
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