Former JP Morgan Chase & Co (JPM) trader Damien Bombell who left when the bank closed a unit that bet on commodities last year, has started a hedge fund to invest in metals, grains and energy, Bloomberg reported Tuesday. The Strand Global Macro Fund started investing this year with money provided by Bombell and his partners.
The fund plans to start trading with capital from outside clients in January, and is seeking to have atleast $200 million under management, he said. “The reason why people should invest in strategies like mine is that we are not in an investing environment anymore,” he added.
Bombell also said, “For the next five to 10 years, we are likely to be in a very disjointed market place, where politicians lurch from one crisis to another. You need tactical traders and people who are mentally flexible.” Bombell, 39, left JP Morgan in November 2010 after the New York-based company told him and other members of the commodities proprietary trading desk it would shut down the unit to comply with U.S. rules that prevent banks from using their own money to wager on markets.
Damien joined traders from firms including Goldman Sachs Group Inc, Citigroup Inc and Morgan Stanley who have left to join or begin hedge funds after the Volcker rule restricted the risk-taking by banks following the collapse of Lehman Brothers Holdings Inc and Bear Stearns Cos in 2008.
20% return target
Hedge-fund startups had the most active first six months of the year since before the financial crisis, helped by investors seeking higher returns as central banks hold interest rates near record lows.
Money managers founded 578 new hedge funds during the first six months of 2011, the most since the first half of 2007, as per Chicago-based Hedge Fund Research Inc.
The Strand fund will try to produce annual returns of 15-20%, said Bombell, who serves as chief investment officer of Zug, Switzerland-based Strand Asset Management AG. Bombell, was born in Sydney said the Strand fund is buying Arabica coffee-based on his view that demand will outstrip supply.
