Ramius' Bill Marr Talks Up Managed Futures
June 8, 2012
Ever since the merger between alternative investment shop Ramius and investment bank Cowen Group in November 2009, the two firms have been looking at ways to integrate and grow Ramius' hedge funds, fund of funds, real estate and cash management businesses.
In March 2010, Cowen Group created Ramius Trading Strategies and launched the RTS Global Fund, a multi-manager fund focused on active trading strategies including managed futures accounts and global investing in macroeconomic trends, through RTS' managed account platform.
Money Management Executive recently spoke to Bill Marr, chief executive of RTS, about the firm's mutual fund offerings and its experience as an ambassador for the alternative mutual fund space.
So tell us more about RTS.
Ramius Trading Strategies is the managed account platform within Ramius. We're essentially the research group dedicated to managed account investing. The senior members of my team all worked at Merrill Lynch together, where I was global head of hedge fund research and portfolio construction. We launched RTS three years ago. To date, we have invested in trading strategies, defined as macro, commodity trading advisor, managed futures and currency-only. We will consider commodity-only as well.
Why did you make the leap from Merrill to Ramius?
I got the itch to start my own company in the wake of the 2008 crisis. Alex Rudin and I are both equity owners of RTS. Ramius owns the majority and we're minority owners. We wanted to build something from scratch. Through the crisis of 2008, I was running all strategies at Merrill (with an equity long/short team, an event team, relative value team, and macro CTA team reporting to me). We also ran a managed account platform called Merrill Lynch Futures Access. Within my group, we would publish asset allocation advice every quarter at Merrill including a recommendation for clients on what portion of their assets to invest in a multi-manager CTA portfolio. We performed extremely well in 2008 so going through that period of time gave us all the confidence to want to do this on a full-time basis and focus on liquid trading strategies.
How many managers are on your platform right now and how do you source them?
Of the 10 managers that are currently on our platform, we have a combination of macro, managed futures and currency-only. From sourcing to due diligence to portfolio construction to monitoring we have four proprietary systems that we use. We also have a preference for managers we've worked with before and who are extremely institutional and dedicated to their own research process, systems, data and infrastructure. In our mutual fund (Ramius Trading Strategies Managed Futures), the smallest manager we have manages $1.5 billion in assets and the shortest track record goes back five years.
Prior to adding managers to the platform, we do initial calls with managers that we have an interest in and if we continue to be interested, we'll go onsite for a visit to their offices no matter where in the world they're located. One of my team members was actually in Asia recently and another in Europe. Even after we've invested with managers, we have a policy where one of us is required to go back onsite every year for an update.
This is your first year participating in the alternative road show. What are your experiences so far?
The idea of the roadshow is that alternative mutual funds are relatively new and there is a lot of interest but a lack of education. So firms got together and took it upon themselves to get out and try to educate the RIAs and consultants. I think it's been fantastic so far and there's been a huge turnout. Compared to 2006, assets in alternative mutual funds are more than five times what they were. There is about $120 billion in alternative mutual funds right now and another $140 billion in alternative ETFs.
Non-correlation is important because when your traditional assets suffer you want to have positions in your portfolio that have the potential to perform and have historically shown strong performance during those periods. If you do that, you lower the overall drawdown of your portfolio, which allows you to stay in the game longer and potentially make better decisions.
Managed futures present an opportunity for advisors to get more exposure to various return drivers across global markets. Investors typically have a variety of options when it comes to equities and fixed income markets, but normally lack investment opportunities to participate in trades such as short Euro dollar or short industrial metals.
What's it like sitting elbow to elbow with your competitors and talking about the merits of alternative investing?
It's a business that's expanding so rapidly that there's an opportunity for a lot of different firms to participate. We all have a vested interest in keeping the standards very high for educating potential investors in these products, and for understanding what's going on with various regulatory bodies. So I think cooperating is a good way to do that. Of course, we do have disagreements on some of the panels, typically between active and passive management. But that's what makes it interesting and gives investors different options.