In China, Former IMF Chief Strauss-Kahn Announces Effort To Raise $2B

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In China, Former IMF Chief Strauss-Kahn Announces Effort To Raise $2B

Dominique Strauss-Kahn, former International Monetary Fund chief, plans to raise $2 billion for a new macro hedge fund.

Strauss-Kahn: Importance of China

Strauss-Kahn’s firm, LSK & Partners, which includes his daughter and economist Vanessa Strauss-Kahn, was on a promotional trip in China when they made the strategic announcement.

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The importance of China, with over 650,000 millionaires and a rapidly emerging institutional appetite for alternative investments, is becoming a region that is increasingly more difficult for hedge funds to ignore.  The fact Strauss-Kahn announced his fund from the Asian nation rather than a European or US location is a nod to this growing importance.  Major Chinese institutional investors, such as the China Investment Corp, have been actively seeking alternative investments for diversification.  “China plays and will play a predominant role in this fund,” Mohamed Zeidan, the firm’s chief operating officer, said in a Reuters report.

No leverage or derivatives

The fund, which is waiting for regulatory approval in Luxemburg before it can accept funds, will not use leverage or derivatives.  The fund will be “as plain vanilla as it gets,” Mr. Zeidan said in a New York Times interview. “We have no leverage whatsoever.”

The new entity, the DSK Global Investment Fund, will follow macro economic trends and utilize the economic policy making experience of Strauss-Kahn to identify profitable trades.  Strauss-Kahn is a special economic adviser to the Serbian government.  He teamed with Thierry Leyne, a civil engineer and a member of the french society of financial analysts, to create LSK & Partners in 2013.

Strauss-Kahn fell from grace in 2011, the Times noted, in a sexual scandal stemming from an alleged encounter with a maid in a New York hotel.  He later settled the claims out of court and criminal charges were dropped.

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Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com

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