Money managers, particularly hedge fund managers, looking for opportunities in alternative investment classes will soon have an opportunity to invest — directly — in futures on such uncommon things as the Consumer Price Index, non-farm payrolls and interest rates.
HedgeStreet Inc., San Mateo, Calif., has been offering such futures to individual investors since October and plans to expand its offering to the institutional marketplace in the fourth quarter, according to Russell Andersson, a co-founder and vice president of instrument origination.
"We're in the business of providing trading opportunities for the institutional community, and our focus is really on hedge funds," Mr. Andersson said in an interview. "With more (hedge fund) entrants, it's harder to make money because the strategies crowd each other out. We allow them to take specific views on economic risk that are not correlated to existing financial markets and provide great opportunities for alpha."
The institutional derivative products will be somewhat different from those offered to retail investors, and contract sizes will be larger, he said. "The big issues of the day — interest rates and oil and gas or energy pricing — we can design products that will allow funds to take a view on those issues."