Krishna Kumar, Ade Odunsi and Treesdale Partners have formed Goose Hollow Capital Advisors to run two FX investment strategies, FX Global Income Access and Commodity Producers Currency Access.
Kumar and Odunsi are veterans of the FX business with a combined 28 years of experience in the FX business. Treesdale Partners is a SEC registered RIA founded in 2002 that manages approximately USD300 million in a number of fixed income focused alternative investment vehicles, for a global clientele including insurance companies, endowments, pensions, banks and wealth managers.
"We feel these investments meet a number of increasingly important needs for our clients, most notably low correlation, high liquidity and transparency," says Treesdale co-founder Dennis Rhee. "We have launched the FX Global Income Access and Commodity Producer Currency Access strategies to offer our clients focused and efficient vehicles with which to access the foreign exchange asset class".
The FX Global Income Access Strategy is Goose Hollow's flagship offering. It takes active positions in the core FX risk factors, carry, momentum and volatility, in 17 different FX pairs using a systematic framework. The system is designed to ensure that the trading signals from each risk factor are internally consistent with each other, maximising expected returns and minimising risk.
"Our overriding objective is to trade efficiently and with discipline and the risk framework we have developed reflects this priority," says Kumar, co-founder and partner. "Unique to our offering is the volatility arbitrage overlay we apply to the portfolio using mean-reversion and volatility-carry filters. Drawing from our experience as option traders, the volatility trading system is constructed to enhance the risk-return profile of the overall portfolio and all this is done in a defined risk manner.”
The Commodity Producers Currency Access strategy draws on academic research that shows a strongly correlated and leading relationship between commodity currencies and commodities. As such it offers dynamic exposure to an investment universe comprising the most liquid currencies of resource rich economies from across the globe.
"We listened to investors and there was clearly demand for a product like this that gives strong commodity exposure, avoids the negative roll-yield associated with most commodity indices, indeed it generates positive carry, but with less than half the volatility, better liquidity and better historical returns", says Odunsi, co-founder and partner. "There are also fundamental reasons for investing in these currencies such as the stronger fiscal position of many of the commodity producers and the inflation protection these currencies have provided historically.”
The strategy would be suitable as a stand-alone investment or as a complement to a commodities allocation.