Sapphire to Seek Luster in G7 Plus Australia

Date: Thursday, June 16, 2005
Author: Christopher Faille, Hedgeworld.com

Crystalline Management, Inc., a hedge fund manager founded in 1997, launched its second fund June 3.

Martin Roberge and Carl Pelland manage the new fund, Sapphire Canada+ Fund. It will follow two strategies, global macro on the one hand and equity market neutral on the other.

Marc Amirault, president of Crystalline, said in a statement that "Investors wishing to gain exposure to international developments impacting Canada and its resource intensive economy will certainly find Sapphire a conceptually appealing product."

The global macro portion of the strategy will stick with the G7 countries (France, the United States, Great Britain, Germany, Japan, Italy and Canada) plus Australia. It will invest in those countries across a range of asset classes, although mostly it will stick to assets that are important to the Canadian economy. "There won't be cocoa or corn futures," said Jean-Pierre Langevin, vice president of operations, in an interview.

The equity market neutral strategy will stick to North America. The new fund won't own stocks, but will take its positions by way of exchange-traded funds and analogous instruments.

Sapphire targets an annual return of 12% to 15% above short-term rates with volatility below 15%.

The new fund's legal counsel is Colby, Monet, Derners, Delage & Crevier, Montreal. PricewaterhouseCoopers, LLC will do its auditing; Scotia Capital, Toronto, its prime brokerage; and RBC Global Services, Toronto, will provide its custodial and administrative services.

The new fund is for Canadian investors only, but Mr. Langevin said Crystalline is contemplating an offshore fund for the near future, perhaps by the end of this year.

Crystalline Management's first hedge fund was the Amethyst Arbitrage Fund, launched in July 1998, which trades in Canadian convertible securities and adopts event-driven strategies. As of May 2005, its net return was 10.5% per year, with a volatility of 4.7%.