Welcome to CanadianHedgeWatch.com
Friday, July 19, 2019

NIAGARA CAPITAL PARTNERS LTD. LAUNCHES FUTURES-FOCUSED FUND AFTER 4 YEAR INCUBATION PERIOD


Date: Thursday, February 24, 2011
Author: Press Release

 
For Immediate Release
February 23, 2011
 



 
NIAGARA CAPITAL PARTNERS LTD. LAUNCHES FUTURES-FOCUSED
FUND AFTER 4 YEAR INCUBATION PERIOD
 
February 23, 2011. Toronto
 
After 4 years of incubating the strategy in the form of a Canadian LP, Niagara Capital Partners Ltd. is making its Niagara Discovery Fund Ltd. available to non-Canadian and non-U.S. investors and the Canadian LP, the Niagara Discovery Fund more widely available to Canadian investors. A slow, organic approach is in keeping with the firm’s culture.
 
The fund is the creation of Niagara CIO David Rothberg and Albert Friedberg, CIO of Friedberg Mercantile Group Ltd. (FMGL) and the PM of the Friedberg Global Macro Hedge Fund Ltd. Rothberg has worked at FMGL since the 1970s as an analyst, portfolio manager of futures and options, product developer, and founding -- and current -- member of its risk management committee.
 
“At Friedberg we take our time to get confident things work before offering them to outside investors,” Rothberg says. The Friedberg Global Macro Fund, like the Niagara Discovery Fund, had a four year history before being actively marketed.
 
Niagara Discovery Fund uses many of the same tools Rothberg has seen FMGL use in its asset management business over the years: momentum, fundamental and technical analysis, sentiment, pattern recognition, and value. Being different, the tools offer relatively uncorrelated return streams.  
 
To find ‘operators’ for the tools, Friedberg developed a qualitative method. Rothberg got traders’ month end statements, plotted their buys and sells over the charts of markets they traded, then Friedberg, without knowing anything about the trader or his returns, looked at the trading patterns in search of ‘elegance’.
 
“We didn’t define the term,” Rothberg explains. “Friedberg assumed we’d know what it meant when we saw it. And he was right.”
 
The first operator Friedberg and Rothberg chose was a momentum specialist. The pattern recognition specialist came on board ten months later, the fundamental and technical operator five months after that. Value joined in the summer of 2009, and sentiment in the fall of that year.
 
“It’s a good team,” Rothberg says. “The operators come from different backgrounds and use different approaches but they all embody dedication, creativity, sharpness and tough-mindedness.”
 
While they were searching for the right mix of tools and operators, Rothberg and Friedberg developed a risk management process customized to the fund.
 
“We learned to allocate in terms of volatility and correlation, i.e. in terms of capital preservation and not in an attempt to maximize returns,” Rothberg says. “We learned how to verify that each operator observed his own, local, risk management rules. And we learned how to determine when the tools in aggregate accidentally brought too much risk to the portfolio universally. And finally we developed a method of seeking to hedge that risk out.”
 
In taking from 2006 to 2010 to refine and test, the Canadian LP marinated in three distinct and very challenging environments. It was profitable in all of them, including 2008 and 2009, the latter being a particularly difficult year for futures-focused strategies.
 
One, three, and life-to-date returns of the Canadian LP have been 22.99%, 20.15%, and 18.78%, respectively. Annualized volatility has averaged 16.65%.*
 
“Good things take time,” Rothberg says.
 
“Niagara Discovery Fund is a fund built entirely on our experience. We know the tools work. We understand how they work. We used our experience to develop our own way of selecting the operators. Experience is another way of speaking about time.”
 
Niagara Discovery Fund Ltd. is a feeder fund to Niagara Discovery Master Fund Ltd., a Cayman Islands fund of managed accounts custodied at Goldman Sachs Execution & Clearing, L.P. through Merlin Securities. Seward and Kissel LLP and Walkers are counsel to the fund and to Niagara. Rothstein Kass & Company audits. Cayman National Fund Services Ltd. is the administrator.
 
Niagara Capital Partners Ltd. is an asset management firm headquartered in Toronto, Canada specializing in liquid alternative investment strategies.
 
*“Past performance is no guarantee or projection of future results. Performance numbers reflect a ceiling on administrative expenses charged to the fund of 40bps. Performance attributable to all five ‘operators’ from November 2009 only. Under no circumstances should the information contained herein be used or considered as an offer to sell, or a solicitation of an offer to purchase, any security or investment service. The information presented herein is presented in summary form and is, therefore, subject to qualification and further explanation. More complete information about Niagara Capital products and services is contained in the descriptive documents for such products and services.”
 
 
For further information contact: Maureen Darrigo at mdarrigo@niagaracapital.ca
 
###


Please click here for a pdf version of this press release.