Canadian firms announce launch of merchant bank to invest and take stakes in CTAs

Date: Thursday, February 3, 2005

Integrated Asset Management Corp., Integrated Partners, its private equity unit and Integrated Managed Futures Corp., its CTA (Commodity Trading Advisor) announced today that capital raising has begun for the Integrated CTA Merchant Bank. The CTA Merchant Bank is a new type of investment vehicle which will combine exposure to multiple managed futures trading programs with significant equity investments in emerging CTAs (Commodity Trading Advisors). Structured as a limited partnership, the CTA Merchant Bank will take advantage of the unique characteristics of the managed futures industry. The fund is intended primarily for institutional investors. Approximately half of all CTAs have less than $10 million in assets under management. If these CTAs get their assets above $20 million, they typically grow very quickly thereafter. The CTA Merchant Bank will invest up to $15 million with a number of emerging CTAs, thus getting them over the $ 20 million threshold. In return for the allocation, the CTA Merchant Bank will take an equity or other economic interest in each CTA of approximately 30 %. The CTA Merchant Bank will reduce operational risk and enhance the business operations by providing assistance with management, marketing, compliance, back office functions and risk control. The CTA Merchant Bank is similar to existing incubator funds of emerging hedge funds that take equity interests in managers in return for significant allocations to those managers. However, the CTA Merchant Bank is unique in its focus on managed futures, the combined specialized skills of the partners to successfully identify and nurture the promising emerging CTAs and the capital raising and distribution strength of the affiliated companies. Integrated Partners will be the General Partner and Integrated Managed Futures will be the Investment Manager. Altegris Investments of La Jolla, California, an investment management firm specializing in alternative assets, will assist with portfolio analytics, manager selection and real-time oversight and risk control. Integrated Asset Management Corp. is a leading manager of alternative assets with more than $ 2.6 billion in assets and commitments under management in private equity, private debt, real estate, managed futures and hedge funds.