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New Canadian hedge fund targets euro-zone crisis

Date: Friday, June 25, 2010
Author: Globe & Mail

It’s not surprising that hedge fund managers will try to make money from Europe’s financial crisis.

But a hedge fund whose investment strategy simply focuses on the woes in the euro-zone seems, well, rather narrow.

Still, Canadian investment firm Redwood Asset Management Inc. plans on July 12 to launch the Garrison Hill European Crisis Fund that aims to provide investors with the ability to “profit and hedge their portfolios from deteriorating political and economic conditions in the euro zone.”

Billed as Canada’s first European crisis fund, it will be actively managed by Toronto-based Garrison Hill Capital Management Inc. using long and short strategies for everything from currencies to bonds and stocks.

But what happens if this crisis blows over? Does the fund wind up?

Michael Yhip, president and chief investment officer of Garrison Hill Capital Management, is betting that Europe’s problems are not short term. "We believe that these are structural issues that will take years to resolve,” he says. “The European Crisis Fund provides investors a unique investment opportunity and risk management tool.”

It will be interesting to see how many investors agree with him.