CitiFX has launched a new multi-manager platform, CitiFX Access, offering a range of vehicles facilitating investment in FX managers via multi-strategy benchmark and actively-managed indices licensed from leading index sponsors.
The returns of these indices are driven by the performance of currency programs run by the most prominent hedge funds, asset managers and advisors in the industry. From inception, the platform will represent about 35 currency programs estimated to account for more than 50% of the assets under management in currency funds.
CitiFX Access is partnering with BarclayHedge, Parker Global Strategies, Absolute Return Strategies and Quaesta Capital -- prominent research companies, investment advisers and fund of funds -- to create a range of solutions for investors seeking to capture FX alpha.
CitiFX Access will make the BarclayHedge BTOP FX Index and the Parker Global Currency Manager Index (PGS CMI Index) investable for the first time, allowing clients to capture the performance of these well-known industry references. Absolute Return Strategies will provide diversified currency alpha by actively allocating to different trading styles, while Quaesta Capital will offer a thematic approach via its Global Growth, Momentum and Market Neutral multi-manager indices.
"FX as an asset class is now a well-accepted idea and CitiFX Access completes the range of services we are offering. It makes investment in currency alpha easier and more efficient and will help create stronger partnerships with our clients. With cross-asset diversification drying up, all potential sources of returns need to be considered and liquidity becomes an increasingly important criteria. Investment in FX is the opportunity of choice in that respect," says Anil Prasad, Global Head of FX and Local Markets at Citi.
Sol Waksman, CEO of BarclayHedge, describes the new platform as a game changer for alternative benchmark providers. Virginia Parker, CEO of Parker Global Strategies says: "Giving real access to benchmark indices is extremely powerful and reflects current investor demand. We are very excited about the platform's potential."
Other products available include the Alpha Blend family of indices, created by John Dean, CEO of Absolute Return Strategies. It consists of 8 to 10 managers with long-term market experience who achieve attractive risk-adjusted returns with an emphasis on low downside risk by allocating to uncorrelated trading styles. Pablo Frei, head of FX multi-manager programs at Quaesta Capital, has taken a different approach by developing style-centric indices that will answer specific investor needs. The Quaesta Capital Style Indices are based on an in-depth due diligence process and a vigorous, daily strategy monitoring.
Citi will make these indices available to institutional clients through index swaps and funded structures. These will address the portable alpha and alternative investment needs of real money managers, sovereign wealth funds, high net worth individuals and pension fund portfolios.
CitiFX Access indices will be published on Bloomberg (page CEXT ) and on CitiVelocity.